CAC 40 Falls to Six-Month Low

The CAC 40 fell 1.6% to close at 7,835 on Thursday, hitting its lowest level since late March amid growing concerns over France’s deteriorating public finances. France presented its 2027 budget bill, seeking to cut spending and raise taxes as it tries to balance strained debt markets with public discontent over the rising cost of living. The country has struggled to contain its debt, with the budget deficit still well above the eurozone’s 3% ceiling. Under the draft budget, the government aims to reduce the deficit to 5% of GDP through 43 billion euros in spending cuts and other measures. France’s 10-year OAT yield surged above 4.9%, reaching its highest level since July 2002 after posting its biggest quarterly increase in nearly four decades. Losses were broad-based, with LVMH down 2.7%, BNP Paribas falling 3.6% and Airbus losing 2.6%.

The CAC 40 fell 1.4% to 7,856 on its first trading day of October, hitting its lowest level since late March as investors cautiously await on France's upcoming 2027 budget amid growing concerns over the country's deteriorating public finances. Prime Minister Sébastien Lecornu is due to unveil the draft budget, with the government targeting a reduction in the fiscal deficit to 5% of GDP in 2027 from 5.4% this year through a €54 billion fiscal consolidation package combining spending cuts and selective tax measures. The plan includes pension savings, a public-sector wage freeze, changes to state-funded sick leave, and an extension of a one-off levy on large companies. With borrowing costs rising and investors growing wary, competing proposals to curb France's debt burden have emerged as a key issue ahead of April's presidential race. Most stocks traded lower, with financials among the worst decliners, including BNP Paribas (-2.6%), Credit Agricole (-2.7%), and Societe Generale (-2.6%).

The CAC 40 Index is dropping 127 points. Leading the losses are Accor (-2.94%), Capgemini (-2.79%) and Edenred (-2.65%).