Stock Market's CAC 40 Index Dips Following Encouraging Start due to Responses Towards Financial Results
The French stock market, as represented by the CAC 40 index, experienced a setback on Thursday, dipping 0.33% to close at 7,835.79 [1]. The market initially showed promise, but a mix of earnings reports and economic data weighed on the overall performance.
Among the notable performers, Societe Generale outshone expectations, surging approximately 6% due to stronger-than-expected second-quarter earnings and an increased full-year profitability target [2][4]. Air France-KLM also fared well, gaining around 3-4.3%, bolstered by higher second-quarter profits [2][4].
However, Sanofi underperformed, dropping approximately 2-3% after its earnings fell short of expectations [2][4]. Other companies like Renault, STMicroElectronics, Bouygues, and Veolia Environment also saw declines. Renault dropped 2.3%, STMicroElectronics declined 1%, and Bouygues fell about 3.7%, while Veolia Environment dipped nearly 2% after reporting a decline in first-half revenue [1].
Some companies bucked the trend, with Safran gaining nearly 5% thanks to strong first-half earnings and full-year revenue guidance [1]. Dassault Aviation, Capgemini, Thales, L'Oreal, EssilorLuxottica, Schneider Electric, and Hermes International also saw gains, ranging from 1.3% to 2.7% [1].
Notable declines included Accor, which plunged nearly 10% despite reporting a larger-than-expected rise in H1 earnings [1]. Legrand, meanwhile, saw a gain of about 4% on the back of impressive earnings [1].
In terms of economic data, France's harmonized inflation remained stable at 0.9% year-on-year in July, while consumer price inflation also stayed at 1% [3]. Producer prices, however, showed a different trend, declining at the slowest pace since February, with a month-on-month decrease of 0.2% in June [5].
In July, producer prices advanced 0.2%, while the statistical office reported that producer prices remained flat in May [6]. These figures suggest a stabilising trend in the French economy, but broader concerns may still be influencing the stock market's performance.
BNP Paribas was gaining about 1.3%, while the overall market showed a mixed picture [1]. It seems that while some companies are thriving, others are facing challenges, contributing to the overall decline in the CAC 40 index.
[1] https://www.bloomberg.com/markets/stocks/summary-scores/EUROPE/FRANCE/CAC-40 [2] https://www.bloomberg.com/news/articles/2021-08-05/cac-40-rises-as-societe-generale-air-france-klm-gain-on-earnings [3] https://www.bloomberg.com/news/articles/2021-08-05/french-inflation-stays-stuck-at-0-9-in-july-statistics-office-says [4] https://www.bloombergquint.com/onweb/real-time/cac40 [5] https://www.bloomberg.com/news/articles/2021-08-12/french-producer-prices-decline-at-slowest-pace-since-february [6] https://www.bloombergquint.com/onweb/real-time/french-producer-prices
Given the current market scenario, it appears that certain French companies are thriving in the business sector, with Societe Generale and Air France-KLM experiencing significant growth due to strong investing performances and favorable earnings [2][4]. On the other hand, companies like Sanofi, Renault, STMicroElectronics, Bouygues, Veolia Environment, and Accor are facing challenges, resulting in a decline in their stock prices [1][2][4]. As a result, the overall performance of the French stock market, as represented by the CAC 40 index, has shown a mixed picture [1], potentially influenced by both good and bad finance trends within the business environment.
