Paris Stock Exchange: Luxury Drags Down CAC40 Close, Kering and Hermès Plunge

Luxury at the Heart of a Two-faced Session

The Paris Stock Exchange experienced a mixed climate throughout the day. Among the 40 stocks of the main index, the market split into two perfectly symmetrical blocks: 20 gains on one side, 20 losses on the other, without any stable stocks. This arithmetic division, however, masks a clear imbalance: the most significant declines, concentrated among luxury heavyweights, were enough to drag the entire index into the red.

The international context did not help to ease the atmosphere. The American naval blockade around Iranian ports, in effect since the previous day, continued to increase pressure in the Strait of Hormuz, the passage through which sanctioned tankers transit. In Europe, the STOXX 600 fell by 0.41%, while the London FTSE 100 dropped by 0.36% at the close. The German DAX was an exception, ending with a slight increase of 0.14%. In Asia, the session was much more favorable, with the Nikkei 225 soaring by 2.89% in Tokyo. On Wall Street, the trend was mixed at the start of the session: the Dow Jones fell by 0.40%, while the S&P 500 gained 0.40%, and the Nasdaq advanced by 0.95%.

Publicis, Stellantis, and Eurofins Stand Out

Publicis Groupe recorded the best performance in the CAC 40, rising by 2.88% to 78.52 euros. The advertising group reported a first quarter marked by organic growth of 4.5%, although total net revenue fell to 3,460 million euros, hit by a negative exchange rate effect of 268 million euros. The market evidently welcomed the underlying business momentum.

Stellantis advanced by 1.93% to 7.06 euros, buoyed by encouraging figures. The automaker announced a 12% increase in sales for the first quarter, reaching 1.4 million units, confirming the operational recovery initiated in recent months.

Eurofins Scientific gained 1.81% to 69.72 euros, following the announcement of the sale of its MET Labs division to UL Solutions for 575 million euros. This strategic operation was well received. Euronext (+1.52%) and Dassault Systèmes (+1.49%) rounded out the leading gains.

Kering and Hermès: French luxury takes a hit

The session will be particularly remembered for the dramatic decline in the luxury sector. Kering fell by 8.84% to 255.25 euros, marking the biggest drop in the CAC 40. The group reported stable revenue for the first quarter, weighed down by an 8% drop from Gucci, its flagship brand. Three major transactions—in beauty, jewelry, and real estate—accompanied this disclosure but were not enough to reassure investors. Following this, Bernstein lowered its price target from 235 to 220 euros, and Deutsche Bank from 290 to 280 euros.

Hermès experienced an almost equally severe decline, falling 8.02% to 1,640 euros. The Faubourg-Saint-Honoré-based saddler reported revenues of 4.1 billion euros, showing a 6% organic growth that was negated by a 290 million euro currency impact. The market penalized the company for a fragmented geographical outlook, with some regions showing a significant decline.

Further down the list of declines, Safran fell by 2.87% to 308.30 euros, Saint-Gobain by 1.83% to 76.32 euros, and STMicroelectronics by 1.05% to 34.43 euros. For the latter, however, Deutsche Bank initiated a buy recommendation with a raised target from 32 to 42 euros.