On Wednesday, the Paris Stock Exchange saw a significant decline, with the CAC 40 index dropping 1.17% amid waning hopes for a resolution to the Ukraine conflict and new tariff threats from the Trump administration. Investor sentiment is becoming more cautious as direct U.S.-Russia talks exclude European and Ukrainian officials. While Nexans reported strong earnings, Icade faced disappointing results, leading to an 8.77% stock drop. In contrast, STMicroelectronics’ shares rose 7.87% due to an improved price target from analysts.
Paris Stock Exchange Experiences Significant Decline
On Wednesday, the Paris Stock Exchange faced a notable downturn, primarily influenced by diminishing expectations for a resolution to the ongoing conflict in Ukraine, coupled with emerging tariff threats from the Trump administration. The prominent index, CAC 40, closed lower by 1.17%, losing 96.02 points and settling at 8,110.54 points. This follows a slight increase of 0.21% the day prior, where it reached 8,206.56 points.
Investor Sentiments and Market Reactions
As the situation surrounding the Ukrainian conflict evolves, investors are becoming increasingly skeptical. Christopher Dembik, an investment strategy advisor at Pictet AM, observes that the once “bullish trend in European markets linked to hopes for a peace agreement in Ukraine” has come to an end, with market expectations now seen as “overly optimistic.” Analyst Fawad Razaqzada from City Index notes that “cautious optimism regarding a potential resolution is diminished by the conspicuous absence of Ukrainian and European officials from discussions between the United States and Russia.”
Recent developments include direct talks between the United States and Moscow, marking the first meeting between their foreign ministers since the conflict started, held in Saudi Arabia. The exclusion of European and Ukrainian representatives has raised concerns about a possible agreement that may undermine their interests. In response, Ukrainian President Volodymyr Zelensky criticized the U.S. administration for being influenced by “Russian disinformation,” following Donald Trump’s remarks that echoed Kremlin narratives.
Trump labeled Zelensky a “dictator without elections” on his Truth Social platform, complicating the prospect of achieving a peace agreement, according to Dembik. Meanwhile, French and broader European stocks are reacting to Trump’s ongoing trade war, as he announced plans for imposing tariffs nearing 25% on imported cars, semiconductors, and the pharmaceutical sector.
Company Highlights: Nexans and Icade
In positive news, French cable manufacturer Nexans, the second largest globally behind Prysmian, reported results that exceeded expectations for its 2021-2024 strategic plan. The company’s net profit surged by 27% in 2024, reaching 283 million euros, resulting in a stock price increase of 10.05% to 105.70 euros.
Conversely, Icade, a real estate branch of the Caisse des dépôts et consignations, reported disappointing financial results for 2024, primarily affected by a downturn in new real estate developments. Its promotional revenue declined by 6.1% to 1.2 billion euros, despite a 4.7% rise in net rental income to 347 million euros. Following the announcement, Icade’s stock plummeted by 8.77% to 20.80 euros.
On a brighter note, French semiconductor company STMicroelectronics saw its stock rise by 7.87% on the CAC 40, closing at 24.95 euros, after Jefferies analysts raised their price target from 23 to 34 euros, reflecting increased confidence in the company’s future.