This morning, the Paris Stock Exchange surged nearly 0.9% to around 8115 points, driven by strong performances from Legrand, Michelin, and EssilorLuxottica. Optimism regarding a potential ceasefire in Ukraine, following discussions involving Donald Trump, has also bolstered markets. Investors are focusing on upcoming economic data from Europe and the U.S., including industrial production figures and the producer price index. Corporate earnings showed mixed results, with some companies experiencing declines despite revenue growth.
Paris Stock Exchange Sees Significant Gains
This morning, the Paris Stock Exchange experienced a notable surge, climbing nearly 0.9% to around 8115 points. This upward momentum was largely fueled by impressive performances from major companies such as Legrand, which rose by 6%, Michelin with a 5.5% increase, and EssilorLuxottica, which saw a 4.5% uptick following the release of their financial results.
Geopolitical Developments and Economic Indicators
The markets are also benefiting from a recent calming discussion regarding the situation in Ukraine, where Donald Trump expressed optimism about a potential ‘ceasefire’ after engaging in talks with Russian and Ukrainian leaders. He mentioned that both Washington and Moscow are set to initiate negotiations aimed at peace, even hinting at a possible meeting with Vladimir Putin in Saudi Arabia.
The notion of a resolution to the ongoing conflict in Ukraine, which has been tentatively suggested by analysts in recent months, is viewed as a significant factor that could bolster European stocks throughout the year. This potential development could be complemented by anticipated interest rate cuts and a rebound in economic growth.
Economists believe that a peace settlement would particularly benefit the manufacturing sector, which has been grappling with soaring energy prices since the start of the conflict. As the day progresses, investors will focus on fundamental economic data releases from both sides of the Atlantic.
In Europe, traders will closely monitor the latest industrial production figures for the eurozone, hoping for positive surprises, especially following a reported 2.4% decline in Germany’s industrial output in December. Forecasts suggest a month-on-month decrease of 0.4% for the previous month of 2024.
Across the Atlantic, markets are keenly awaiting the producer price index for January, particularly after yesterday’s disappointment regarding consumer price data. Wall Street faced a downturn yesterday, with stocks reacting to a higher-than-expected Consumer Price Index (CPI), which has delayed expectations for a new Fed rate cut.
The anticipated easing of tensions in Ukraine has provided a boost to the euro, which has risen above $1.041 (+0.3%), while simultaneously influencing oil prices, with Brent crude oil dipping 0.3% to $74.7 per barrel.
In terms of corporate news from France, Michelin reported group sales of €27,193 million for 2024, reflecting a 3.1% decrease at constant exchange rates. The company’s net income also saw a slight drop to €1,890 million in 2024, compared to €1,983 million in 2023.
Legrand, on the other hand, disclosed a net income attributable to the group (RNPG) that rose by 1.6% to nearly €1.17 billion for 2024, although its adjusted operating margin slipped 0.5 points to 20.5% of sales. Orange reported a net income decrease of 3.7% to €2.35 billion for 2024, despite an increase in EBITDAaL by 2.7% to €12.1 billion and a 5.9% rise in organic cash flow from telecom activities to €3.37 billion.
EssilorLuxottica announced an adjusted net income growth of 6% to €3.12 billion for 2024, alongside an adjusted operating income of 16.7% of revenue, marking an improvement of 20 basis points, and an increase of 50 basis points to 17% at constant exchange rates.