Strong performance during earnings season offsets debt concerns, French stock market hits all-time high

On October 21, Jin10 reported that driven by strong corporate earnings in France offsetting concerns about political turmoil and credit outlook, the French stock index broke through the historical closing high set in May 2024. The CAC40 index in France rose by as much as 0.4% to 8240.92 points on Tuesday, surpassing the high point prior to the market turmoil triggered by President Macron's sudden announcement to dissolve parliament in mid-2024. Last week, Prime Minister Leclerc successfully broke the parliamentary deadlock, overcoming two no-confidence votes, paving the way for budget discussions and boosting the Benchmark index. Meanwhile, the strong start to earnings season also mitigated the negative impact of S&P Global Ratings' unexpected downgrade of France's sovereign credit rating last Friday - a move that highlights the country's fiscal difficulties. Christopher Danbick, a senior investment advisor at Baida Asset Management, stated: “The downgrade has been fully absorbed by the market, and investors are focusing on the earnings reports of companies like LVMH. What truly drives the market is the earnings season that exceeds expectations and has a good start.”