(News Bulletin 247) – The Parisian index gained 2% at the close of this Wednesday, October 15, supported by the luxury group which gained more than 12% after delivering activity clearly above expectations in the third quarter.

Sometimes it is enough for the largest (or almost) group on the Paris Stock Exchange to be in great shape to give a boost to the CAC 40. The flagship Parisian index ended the day on Wednesday, October 15, up sharply by 1.99% to 8,077 points, achieving its best daily score since the beginning of May (+2.33%).

If the record is still a little higher (8,259 points reached last April), it can now be considered again by the Paris market.

LVMH was without any hesitation the great locomotive of the day. “Luxury is making its big comeback on the stock market. After several months of doubts linked to Chinese demand, LVMH is sending a signal of resilience which restores confidence to the entire market,” analyzes Antoine Andreani, Head of Research at XTB France.

Driven by activity significantly above expectations, particularly in its fashion and leather goods division, the luxury group jumped 12.5%, a sufficiently notable increase for the action to underline it.

LVMH second weighting of the CAC 40

Remember that, according to the latest indications from Euronext (end of July), LVMH was the second weighting in the calculation of the CAC 40 behind Schneider Electric, with 6.66%. To simplify, this means that today’s increase in LVMH adds more than 1 percentage point to the variation in the CAC 40.

It is also a time for optimism on Wall Street, after comments from the chairman of the American Federal Reserve on the weakness of the American job market, which reinforced expectations of further rate cuts in the United States. The results season across the Atlantic is also starting on a good note, with American banks having revealed quarterly accounts better than expectations. The Dow Jones gained 0.6%, the Nadsaq 1.1% while the S&P 500 gained 0.5% at the close of the European stock markets.

In French political news, Prime Minister Sébastien Lecornu pledged on Tuesday to suspend the 2023 pension reform in its entirety. A gesture which should allow its government to avoid censorship and thus ensure that France does not become stuck in an intense political crisis.

“Even if this weighs on the sustainability of the debt, the markets have been reassured, seeing it as a guarantee of political stability,” notes Jim Reid of Deutsche Bank.

The Prime Minister also clarified this Wednesday that the suspension of the 2023 pension reform, announced the day before, should take place through an amendment to the social security financing bill (PLFSS).

Luxury and telecoms at the party

Coming back to values, LVMH pulled in its wake the other luxury players (Hermès gained 7.36% and Kering 4.8%) but also L’Oréal (+3.1%), and the spirits groups, Rémy Cointreau taking 5% and Pernod Ricard 1.6%.

In addition to luxury, telecom operators have made progress. Bouygues, owner of Bouygues Telecom, gained 7.4% and Orange closed up 3.3%. The two groups submitted a joint offer alongside Iliad to take over the majority of SFR’s assets, an offer that Altice, the parent company of SFR, rejected this Wednesday morning. This does not prevent the market from playing the consolidation of the sector, which, in terms of prices, would benefit the entire telecoms industry.

Rexel gained 1.3% after slightly raising its annual growth outlook during its third quarter activity update.

On other markets, the euro gained 0.3% against the dollar to 1.1626 dollars. Oil is falling. The December North Sea Brent contract fell 0.6% to $62 per barrel and WTI listed in New York lost 0.5% to $58.40 per barrel.