The Paris Stock Exchange fell sharply on Wednesday, weighed down by a steep decline in luxury stocks following disappointing results from Kering and Hermès, all against the backdrop of ongoing international tensions between the United States and Iran.
At the opening this morning, while the Stoxx Europe 600 index was virtually flat, the CAC 40 fell 0.9%. Other European markets fared slightly better, with the Frankfurt DAX 40 gaining 0.1% and the FTSE 100 in London rising 0.2%.
The collapse of the luxury sector breaks the CAC 40’s momentum
The session indeed began in the red for the CAC 40, which saw its losses widen in the morning to around -1.2%, trading near 7,950 points. While the start of the week had marked relative stability for the Paris Stock Exchange, the luxury sector’s results changed the game.
Indeed, the main shock came from Hermès, whose stock plunged by –12%, marking one of the sharpest drops in its recent stock market history. The group reported disappointing quarterly results: sales down 1.4% year-over-year to €4.1 billion, once again due to weakness in the Asian market and the impact of tensions in the Middle East, despite a 6% increase in overall revenue at constant exchange rates. At midday, the stock remained very weak, down -8.6%.
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