CAC 40 Turns Red as Hermès Plunges 7%

A session weighed down by luxury stocks and pressure on government bonds

The atmosphere is heavy on Euronext. Of the forty stocks in the CAC 40, thirty-two are declining and only eight are advancing. This movement is also affecting other European markets, in a climate where French sovereign debt remains the focus of attention. The previous day, the yield on the ten-year OAT briefly crossed the symbolic 5% threshold for the first time since 2002, before settling around 4.9%. The yield spread with the German Bund now hovers around 160 basis points, indicating an increased risk premium on French securities amid the examination of the 2027 finance bill and ongoing very intense social tensions.

Adding to this backdrop is a tense energy context. Brent is trading near $110 a barrel, close to a five-month high, driven by disruptions in maritime traffic in the Middle East and uncertainties around the Strait of Hormuz. Financial stocks are paying a high price in this configuration: BNP Paribas is down 3.47% to 83.80 euros.

Hermès Falls After Sluggish Third Quarter

The biggest drop of the day goes to Hermès, which plummeted by 7.48% to 1,255 euros. The luxury goods company reported on October 22 a revenue of €12,260 million for the first nine months of the year, an increase of 6.0% at constant exchange rates. However, it was the third quarter that disappointed: at €4,096 million, growth was reduced to 4.3% at constant rates, compared to 6.1% in the first half. Leather goods still advanced by 10.8%, while the Asia-Pacific region excluding Japan, the group's largest market, remained stable for the quarter. These figures are part of a challenging period: on October 5, the stock hit a four-year low at 1,260 euros.

The rest of the decline rankings are dominated by cyclical and industrial stocks. STMicroelectronics lost 3.76% to 40.44 euros, Legrand dropped 3.62% to 126.55 euros, and ArcelorMittal fell 3.59% to 54.22 euros. Semiconductors, electrical equipment, and steel thus account for a substantial portion of the sell-off.

Eurofins and Bureau Veritas withstand market pressures thanks to their reports

In such a deteriorated market, the few increases are mainly due to well-received publications. Eurofins Scientific gains 1.41% to 82.04 euros. The group revealed the day before a revenue of 5,614 million euros over nine months, up 3.7%, with organic growth increasing from 2.5% in the first quarter to 3.5% in the third. However, the company acknowledged that its annual organic target would not be met, while maintaining its profitability and cash flow targets. Deutsche Bank raised its price target to 67 euros, remaining on hold, while Alphavalue downgraded to underweight with a target raised to 78.60 euros.

Bureau Veritas advances 0.42% to 28.85 euros after a third quarter up 10.1%, driven by internal growth, acquisitions, and a favorable currency effect back in play. The group confirmed all of its annual targets. Barclays, with an overweight rating, raised its target to 34 euros, and Rothschild & Co Redburn, rated buy, increased its own to 37 euros. Following this, Danone rises 1.12% to 61.50 euros and TotalEnergies edges up 0.48% to 81.29 euros, supported by strong crude prices. Rare green points in a morning dominated by a decline.