French Equities Edge Lower at Noon Amid Geopolitical Uncertainty

2026-01-12 18:54:57

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European markets remain in focus as the CAC 40 index retreats from earlier levels during midday trading on Thursday. The benchmark French index sits at 8,210.33, reflecting a decline of 23.59 points or 0.29% as market participants weigh geopolitical risks and await critical U.S. economic indicators.

Broad-Based Weakness in Automotive and Materials Sectors

The downsides are concentrated in cyclical sectors. Renault leads the declines with a 4.1% drop, positioning itself as the day’s biggest underperformer in the CAC 40. The industrials and materials space shows particular strain, with Saint Gobain shedding 3.6%, followed by ArcelorMittal and Stellantis, which fall 2.7% and 2.6% respectively. Schneider Electric experiences a nearly 2% pullback, while mid-cap losers including Capgemini, Legrand, Euronext, STMicroelectronics and Bureau Veritas trade between 1.2% and 1.7% lower.

Financial and Consumer Stocks Support the Index

On the positive side, financial sector strength provides some cushion. BNP Paribas advances 2.15%, while Societe Generale and Credit Agricole gain 1.1% and 1% respectively. Consumer staples also display resilience, with Pernod Ricard climbing 1.5%, Danone adding 1.4%, and L’Oreal, Veolia Environment, Orange, Airbus, Sanofi and Engie posting subdued advances.

Employment Figures Show Modest Improvement

Economic data from Eurostat delivered slightly encouraging news. The euro area unemployment rate ticked down to 6.3% in November from 6.4% the previous month, surpassing expectations of stability at 6.4%. Youth unemployment similarly declined to 14.6% from 14.8%, while the EU27 jobless rate held steady at 6% across the period.

Trade Deficit Widens as Expected

France’s trade position deteriorated in December 2025, with the deficit expanding to €4.2 billion from a revised €3.5 billion in November. Import volumes grew 2% month-on-month to reach €56.4 billion, outpacing export growth which advanced 0.8% to €52.2 billion. The deterioration aligned with market forecasts.

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