Paris Mixed: Danone Drops 8%, Luxury Attempts to Rebound

A Paris Trading Session Shaken by Danone

On Wednesday, January 21, the CAC 40 closed at 8069.17 points, a symbolic rise of 0.08%, in an environment overshadowed by Danone's collapse. The food industry giant plummeted by 8.42% to 67.40 euros, marking its worst session since March 2020 and its fourth consecutive decline. The stock was weighed down by the announcement of a recall of its Dumex brand infant formula in Singapore due to the detection of cereulide, a toxin that can cause digestive issues. Although Danone's direct exposure is limited, this news has reignited fears of a broader problem affecting the sector, as Nestlé and Lactalis are also facing similar recalls.
Meanwhile, on Tuesday, Bank of America lowered its price target from 70 to 69 euros, citing the impact of the declining birth rate in China, where births fell by 17% in 2025. The mixed market sentiment in Paris reflects this uncertain atmosphere: 24 stocks advanced while 16 declined, indicating a hesitant market. Trading volumes remained low, a sign of investor caution in the middle of a week marked by trade tensions between Europe and the United States.

Rebound in Cyclical and Luxury Sectors

Amid Danone's plunge, cyclical and luxury stocks dominated the top of the board. ArcelorMittal gained 4.76% to 43.58 euros, driven by the prospects of an improving steel market with the implementation of the carbon border adjustment mechanism set for January 2026. The steelmaker has now posted a remarkable increase of over 83% year-on-year. Renault jumped 3.30% to 32.90 euros, benefiting from bargain buying after intense tensions over the automotive sector due to threats of increased US tariffs. STMicroelectronics rose 3.21% to 24.24 euros, following the favorable momentum observed in the semiconductor sector over recent weeks. The luxury segment also contributed to the rebound: Pernod Ricard gained 2.75% to 76.18 euros, while LVMH recovered 2.67% to 585.20 euros after several challenging sessions. This recovery in luxury stocks comes after a tough week marked by tariff threats from Donald Trump targeting European countries, which had dampened the sector.

The rest of the market in the red

Following Danone, declines were concentrated among several heavyweights. Euronext fell 2.96% to 121.40 euros, AXA dropped 2.26% to 38 euros, Orange decreased 2.01% to 14.38 euros, and Bouygues lost 1.07% to 44.21 euros. This distribution of losses, affecting sectors as diverse as financial services, insurance, and telecommunications, illustrates the lack of a clear leading narrative in this mid-session in Paris. Investors seem to be taking a wait-and-see approach, in a context where sector-specific catalysts are scarce and overshadowed by the specter of transatlantic trade tensions. The Paris market thus ends its eighth consecutive session under pressure, stuck between weakened valuations and an ongoing uncertain macroeconomic environment.