CAC 40 Extends Rally To Nine-Month High, Defence Stocks Surge
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The CAC 40, France’s benchmark stock index, reached a nine-month high on Tuesday, February 18, 2025, closing 0.2% higher at 8,207 points.
This marks the seventh consecutive session of gains for the index, which has shown remarkable resilience in the face of ongoing geopolitical tensions.
The index’s performance was driven by a surge in defence stocks, reflecting investor speculation on increased European defence spending amid the ongoing Russia-Ukraine conflict.
Thales (EPA: HO), a major player in the defence sector, led the gains with a 2.3% increase, reaching an all-time high.
Other notable performers included Schneider Electric (EPA: SU), which rose 2.0%, and Société Générale (EPA: GLE), which climbed 2.7%.
This positive momentum came despite early losses and mixed signals from diplomatic efforts.
US and Russian diplomats agreed to establish negotiation teams, indicating a potential path towards de-escalation.
However, an informal summit among European leaders in Paris concluded without concrete measures, particularly regarding the contentious proposal to deploy peacekeeping troops to Ukraine.
The market’s upward trajectory was not uniform across all sectors.
Capgemini (EPA: CAP), a global leader in consulting and technology services, experienced a significant setback, with its shares plummeting 10.2% following the release of its annual results.
Despite beating forecasts, the company reported a 2% decline in annual sales, which unsettled investors. Similarly, Edenred (EPA: EDEN) saw its stock price drop by 4.7%, even after surpassing profit expectations.
The CAC 40’s performance is particularly noteworthy given the broader economic context.
The index has gained 11.27% since the beginning of 2025, reflecting growing investor confidence in the French economy despite global uncertainties.
This upward trend aligns with positive movements in other European markets, with Germany’s DAX and Spain’s IBEX also reaching new highs.
As geopolitical tensions continue to shape market sentiment, investors will be closely monitoring further developments in the Russia-Ukraine peace talks and potential shifts in European defence policies.
The resilience of the CAC 40 in the face of these challenges suggests a cautiously optimistic outlook for French equities in the near term.
Source: Trading Economics