Paris Stock Exchange: CAC 40 Takes a Breather After Iran-US Turmoil, But Nerves Remain Evident

A Fragile Rebound Following Yesterday's Shock

The Paris Stock Exchange is attempting to stabilize this Tuesday after the previous day's rollercoaster events. On March 23, the CAC 40 had plunged more than 2% in the morning due to the US ultimatum to Iran regarding the Strait of Hormuz. It then rebounded sharply during the session when Donald Trump announced « very fruitful » talks with Tehran and postponed military strikes.

This Tuesday at 12:30 PM, the Paris index showed a modest gain of 0.20% at 7,741.92 points in a market that remains cautious. The dispersion is telling: 23 stocks are up, 15 are down, and 2 are stagnant. The rebound is far from unanimous. The atmosphere fluctuates between cautious relief and persistent wariness, as evidenced by the VIX at 26.78, a level indicating high tension, up more than 11%.

The threat of disruption to oil transit in the Strait of Hormuz—through which a major portion of the world's crude passes—has temporarily receded, but the dialogue between Washington and Tehran remains in its early stages. It's this in-between climate that sets the tone for the Paris session: a minimal progression, where each sector reacts differently to the announced de-escalation.

Luxury and Consumer Spending Lead the Way as Publicis Benefits from Commercial Momentum

At the top of the leaderboard, consumer and luxury stocks are in the spotlight. Kering leads the CAC 40 with a jump of 2.30% to 250.85 euros, followed by L'Oréal, which rises by 2.06% to 352 euros. These two heavyweights are benefiting from a relatively calm environment after being impacted by geopolitical tensions in the preceding days.

Euronext, the stock market operator, gains 1.81% to 135.30 euros, as increased volatility naturally leads to sustained market activity.

Publicis Groupe advances by 1.59% to 71.46 euros. The advertising giant is reaping the benefits of favorable business developments: the group announced its seventh consecutive victory in new business according to the COMvergence ranking, confirming its dominant position in media buying in key international markets.

Air Liquide rounds out the top five with an increase of 1.56% to 168.14 euros, as the industrial gas giant continues its steady performance.

Aerospace and Defense Decline, STMicroelectronics Penalized

The bottom of the rankings tells a completely different story. The aerospace and defense sector is experiencing a notable decline, logically correlated with the current geopolitical de-escalation. Airbus drops 1.65% to 163.66 euros, marking the largest decrease in the index. Safran falls by 1.43% to 283.20 euros, while Thales decreases by 0.54% to 237.80 euros. These three stocks, which had benefited in recent weeks from rising international tensions, are giving back some of the ground gained.

Schneider Electric loses 1.36% to 240 euros, as part of a broader decline affecting European industrial stocks.

STMicroelectronics slips 1.19% to 26.68 euros. The Franco-Italian semiconductor manufacturer recently announced the launch of its STM32 chip production in China, in partnership with foundry Huahong. This move to localize the supply chain in China comes amid a geopolitical context where any increased exposure to China raises questions among investors.

As of midday, the Paris market remains delicately poised on the thin thread of the negotiations between Washington and Tehran. The slight greening of the listings does not conceal the prevailing caution: as long as the situation in the Middle East remains unresolved, nervousness will continue to set the pace in European markets.