France’s CAC 40 index headed toward a record close for the first time in more than a year, powered by renewed strength in luxury stocks thanks to China’s reopening from Covid lockdowns as well as robust earnings.
(Bloomberg) — France’s CAC 40 index headed toward a record close for the first time in more than a year, powered by renewed strength in luxury stocks thanks to China’s reopening from Covid lockdowns as well as robust earnings.
The CAC rose 0.9% by 12:00 p.m. in Paris, on a pace to close above the previous record of 7376.37 on Jan. 5, 2022. The index has climbed 14% this year, with investors using luxury stocks as a proxy for the reopening of the world’s second-biggest economy. LVMH, which hit a series of record highs in the past week, Kering SA and Hermes International accounted for close to a third of the rise. Gains in L’Oreal SA, whose cosmetics are also popular in China, added further to the rally.
Markets around Europe are benefiting from cooling inflation, resilient economic activity and mild weather that averted a much-feared energy crisis. The CAC 40 is outperforming the Stoxx Europe 600 Index, which has risen about 10%. Besides the luxury companies, the biggest contributors to this year’s gains are Schneider Electric SE, BNP Paribas SA and STMicroelectronics NV.
The French capital remains ahead of London in the contest for the position of Europe’s biggest equity market by value. Britain’s benchmark FTSE 100 Index closed at a record on Feb. 3 for the first time since 2018.
“European equity markets and among them France are enjoying a strong start of the year,” said Arnaud Cayla, deputy chief executive officer at Cholet Dupont Asset Management in Paris. They’ve been boosted by easing recessions fears, the reopening of the Chinese economy and an encouraging start to the earnings season, he said.
(Updates with background, investor comment in final paragraph)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.