The CAC 40 Index Opens 0.44% Higher

The CAC 40 rose 0.4% on Friday, rebounding from two straight sessions of losses as a pullback in oil prices and global bond yields offered some relief to investors. Still, Middle East tensions kept sentiment cautious after US President Donald Trump said he did not expect the Iran war to end before the November midterm elections and that oil prices were unlikely to decline until then. In Europe, the European Central Bank recently delivered its widely anticipated 25 bps rate hike, its second increase this year, as it sought to contain an energy-driven rise in inflation. The ECB also warned that price pressures could prove persistent, fueling expectations of further policy tightening as early as October. Notable gainers included Airbus (1.6%), Safran (2%), Societe Generale (1%) and Kering (1%). Despite Friday’s rebound, the CAC 40 remained on track for its fifth consecutive weekly decline.

The CAC 40 Index is up by 36 points or 0.44 percent on Friday. Top gainers are Safran (1.93%), Airbus (1.46%) and Accor (0.94%). Biggest losses came from TP (-1.30%), Edenred (-0.85%) and ENGIE (-0.49%).

The CAC 40 fell 0.5% to close at 8,117 on Thursday following the ECB’s decision to raise its key interest rate to 2.5%. The 25-basis-point hike was anticipated after euro area inflation jumped to 3.3% in August, the highest level in three years and above the ECB’s 2% target. “The conflict in the Middle East continues to generate inflation pressures, and inflation is set to remain well above target for an extended period,” the ECB said in a statement. Reports indicated that ECB officials expect to raise interest rates further, with another increase possible as soon as next month. Meanwhile, oil prices jumped as fears of prolonged energy supply disruptions intensified following the biggest wave of attacks on shipping in the Strait of Hormuz by the US and Iran on Wednesday. Luxury stocks posted losses amid elevated risk aversion, with L’Oréal down 1.6% and LVMH shedding 1.2%. Industrial stocks also closed lower, with Air Liquide and Sanofi down 0.9% and EssilorLuxottica losing 2.1%.