(News Bulletin 247) – The flagship Parisian index closed slightly above its equilibrium point, the progressions of Kering and LVMH having enabled it to sign an anecdotal increase. Note that gold prices have crossed the symbolic threshold of $4,000 per ounce for the first time.

The Paris Stock Exchange struggled to move forward, the day after the shock wave caused by the surprise resignation of Prime Minister Sébastien Lecornu. Its main index, the CAC 40, closed on the edge in positive territory, nibbling 0.04% to 7,974.85 points, this Tuesday, October 7.

“Even if the president asked Sébastien Lecornu to devote an additional 48 hours to see if a compromise can be found in the Assembly, the political impasse seems total. This approach by the president still seems to indicate that he is still rejecting the call for a new dissolution of the Assembly. The longer the political impasse persists, the more negative this will be for the economy,” write the LBPAM economists in a note.

Luxury helped by Morgan Stanley

“French assets were negatively affected by this new phase of uncertainty. However, the bond market reacted moderately, with a widening of the spread between the French and German 10-year sovereign rate of less than 4 basis points, rising to 85 basis points (0.85 percentage points, Editor’s note),” they add.

Above all, the political impasse prevents France from adopting a budget for 2026 and thus correcting the trajectory of its public finances. Goldman Sachs is counting on a deficit of 5.5% of GDP for this year (compared to 5.4% for the government) but above all on 5.3% of GDP for 2026, much more than the 4.7% targeted by the resigning Prime Minister Sébastien Lecornu.

On the value side, the trend was supported by increases in luxury goods, notably Kering and LVMH, which gained 5.75% and 3.6% respectively, driven by advice increases from Morgan Stanley to “overweight” on the two stocks.

Excluding the flagship index, LDC, the owner of the Loué brand, rebounded by 6.6%, driven by an acceleration in its growth in the second quarter.

Valneva, however, lost 5.5% after lowering its outlook and postponing the publication of the results of a flagship clinical trial.

On other markets, the euro lost 0.2% against the dollar at 1.1678 dollars. Oil is down slightly. The December contract on North Sea Brent fell 0.3% to $65.25 per barrel while the November contract on WTI listed in New York contracted 0.2% to $61.56 per barrel. Note that gold prices, more precisely futures contracts (December expiry) have exceeded $4,000 per ounce.