FX.co ★ CAC 40 Modestly Higher After Inflation Data

French equities were buoyant on Friday morning, bolstered by investor enthusiasm following the European Central Bank's decision to cut interest rates and its dovish commentary, which hints at further monetary easing in the near future. Market participants are also delving into the latest data concerning France's consumer price inflation and producer prices.

The CAC 40 index, a key benchmark, reached a high of 7,986.37 earlier in the session and is currently up by 21.41 points or 0.27%, standing at 7,963.05.

According to a report from the statistical office INSEE, France's annual inflation rate slightly increased to 1.4% in January 2025 from 1.3% the previous December, based on preliminary estimates. This marks the fourth consecutive month of inflation growth, although the January forecast had anticipated a rate of 1.5%. Additionally, the Consumer Price Index (CPI) posted a 0.1% decline in January, following a 0.2% increase in December.

Preliminary data also indicates the EU-harmonized CPI in France decreased by 0.2% on a month-to-month basis in January 2025. This is in contrast to expectations of no change and comes after a 0.2% rise in December.

In other news, France's producer prices saw a 1% month-on-month increase in December 2024. This is a deceleration from the revised 3.7% rise in the previous month. Annually, producer prices dropped 3.8% in December, following a prior 4.7% decline.

Among stocks, Schneider Electric has risen by 1.7%, while Vivendi, Engie, and Dassault Systemes are experiencing gains ranging from 1% to 1.3%. Sanofi, Safran, Airbus Group, Legrand, Thales, Hermes International, TotalEnergies, Societe Generale, Pernod Ricard, Essilor, Capgemini, and Unibail-Rodamco are also recording modest increases.

Conversely, STMicroElectronics is experiencing a steep decline, down by over 9%, extending its losses from the previous session due to disappointing earnings results that have led investors to reduce holdings. The company reported a fourth-quarter net income of $341 million, compared to $1.076 billion a year earlier. Earnings per share also fell to $0.37 from $1.14 the previous year.

Moreover, the company's net revenue decreased to $3.32 billion from $4.28 billion in the same quarter of the previous year. STMicroElectronics projects a sequential decline of 24.4% in net revenue for the first quarter, bringing it down to $2.51 billion.

Elsewhere, Edenred has decreased by 1.4% and Carrefour by 0.9%. Meanwhile, L'Oreal, Credit Agricole, Stellantis, and LVMH have reported declines ranging from 0.4% to 0.6%.