French Stocks Hold Steady Amid Economic Indicators

French stocks remain buoyant thanks to data showing a slow decline in manufacturing and services. Despite cautious market sentiment, the CAC 40 index shows a slight gain. Investors await clarity on U.S. tariffs, which could impact future market trends.

Date: 24-03-2025

AI Rating: 7

Market Overview: The report indicates that French stocks have maintained a positive trajectory, albeit slightly off their early highs. This is supported by data reflecting a slower decline in both manufacturing and service sector activity during March. The CAC 40 index is noted to have risen by 0.27%, indicative of overall investor confidence in light of the economic data.

Manufacturing and Service Sector Insights: The data reveals that while the manufacturing and service sectors are still in a contraction phase—evidenced by the composite output index below 50.0—they have shown signs of slowing declines. Notably, the HCOB composite output index rose from 45.1 to 47.0 in March, suggesting a slight easing in the downturn. Moreover, service sector improvements outpaced expectations with the Purchasing Managers' Index (PMI) reaching 46.6, a significant increase from 45.3 in February.

Manufacturing Performance: The manufacturing PMI also increased to 48.9, marking its highest point in 26 months, up from 45.8 in February. Though still below the neutral mark, the upward trend in these indicators is crucial for investor sentiment as it points to prospective recovery, even if it remains fragile.

Economic Sentiment: Investors appear to be cautiously optimistic, waiting for details regarding U.S. tariffs, particularly after comments made by President Trump regarding flexibility in tariff implementation. Any concrete developments could potentially influence market dynamics significantly.

Company Movements: Individual stocks have reacted differently, with notable gains from Thales, Renault, and ArcelorMittal, among others. These changes may reflect investor optimism stemming from the revised economic data.

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