Luxury Collapses in Paris: LVMH Drops 7%, Dragging Down the CAC 40

Luxury drags down the Paris market after disappointing LVMH results

LVMH falls by 6.97% at the opening following the release of its 2025 annual results, triggering a sharp correction across the sector. The group released mixed results Tuesday evening, with revenue growth of only 1% on a comparable basis in the fourth quarter, slightly surpassing expectations which anticipated a slight decline. However, investors are particularly concerned about the fashion and leather goods division: although margins held up better than expected, the market is penalizing the drop in the group's margins and its cautious tone in response to early signs of demand recovery. In its wake, other major players in the Parisian luxury sector are also taking a hit. Kering is down nearly 5%, and Hermès drops by more than 2%. This sector-wide downturn is heavily impacting the CAC 40, where luxury accounts for a significant portion of the market capitalization.

STMicroelectronics Stands Out in a Challenged Market

In an overall gloomy environment, a few stocks manage to stand out. STMicroelectronics jumps 3.07%, benefiting from ASML's strong report, another key player in semiconductors. The French-Italian group leads the gains in the CAC 40, joined by other industrial stocks like Schneider Electric (+0.64%) and Legrand (+0.61%). Carrefour also makes headway (+0.98%), while TotalEnergies rises by 0.86%. However, these few resilient stocks are not enough to counterbalance the collapse of the luxury sector, which has a significant weight in the Paris index. The disparity is notable: with only 11 stocks up compared to 28 down, the session demonstrates a real sector rotation, with investors massively moving away from luxury stocks in favor of more defensive or industrial sectors.

Provide advice to private investors: focus on safety over performance

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