(News Bulletin 247) – The CAC 40 fell mid-session this Friday, October 17, weighed down by general risk aversion caused by the difficulties of two regional banks in the United States. Essilorluxottica’s jump allows the Parisian index to contain the damage.

Just as it was starting to touch its records, the CAC 40 is reversing course. The Parisian index dropped 0.67% to 8,126.79 points at mid-session this Friday to 8,133.46 points.

Like all global markets, the CAC 40 is weighed down by a movement of risk aversion caused by the financial difficulties of two American regional banks.

“Two years after the resounding bankruptcy of Silicon Valley Bank (in 2023), new cracks are appearing in the system, this time at the heart of regional banks. The revelations of losses linked to fraudulent loans at Zions Bancorp and Western Alliance Bancorp have revived the specter of financial contagion,” writes John Plassard, investment advisor at Cité Gestion.

>> Access our exclusive graphic analyses, and gain insight into the Trading Portfolio

Essilorluxottica as a bumper

Based in Salt Lake City, Zions Bancorp lost 13.1% on Wall Street Thursday evening after writing down $50 million on a loan taken out by its subsidiary California Bank & Trust, while Western Alliance, based in Phoenix, admitted to being exposed to a borrower who had failed to provide promised guarantees, explains John Plassard.

“These concerns come days after the collapse of subprime auto lender Tricolor Holdings, which forced JPMorgan Chase to record a $170 million charge in the third quarter, leading to higher credit costs and a warning from CEO Jamie Dimon about mounting financial pressures,” explains Patrick Munnelly of Tickmill Group cited by AFP.

Two elements, however, allow the Paris Stock Exchange to suffer less than the Dax 40 in Frankfurt (-2.1%), the Ibex 35 in Madrid (-1%) or the FTSE Mib in Milan (-2%).

Certainly, the banks are falling, with Société Générale losing 5.4%, BNP Paribas 4% and Crédit Agricole SA (-2.8%). But the weight of the banking sector within the CAC 40 is much less, in its composition, than for the Ibex 35 or the FTSE Mib.

Secondly, the CAC 40 is supported by the rise of the optical group Essilorluxottica, the fifth largest capitalization in the index. The stock soared by 12% after a quarter described as “amazing” by Barclays and driven in particular by the dynamics of AI glasses.