The CAC 40 is a stock market index that includes the 40 biggest and most liquid companies listed on the Euronext Paris exchange. The index gives investors a way to check the pulse of the French economy and a chance to get in on some of Europe's most important companies. Similar to the DAX, the CAC 40 is market-capitalisation-weighted, meaning larger companies within the index have a greater impact on its overall performance.
As a result, it provides an overview of the French blue-chip landscape. The CAC 40 is widely recognised as a benchmark for French and European equities and is crucial for investors seeking exposure to the French market.
CAC 40 Price & Chart
After starting 2024 strongly, the CAC 40 experienced a decline between May and early August. However, prior to that pullback, the index had experienced a strong run starting around September 2022. Even so, analysts are somewhat cautious when assessing the current outlook for the index moving into Q4 and beyond.
CAC 40 – Daily Movers
CAC 40 Price Forecast
The CAC 40 is a benchmark index representing France's 40 largest and most liquid companies. As a barometer of the French economy, its performance is closely watched by investors worldwide. Here are the bull and bear arguments:
The Bull Argument: Analysts who remain optimistic about the CAC 40's prospects often cite France's strong luxury goods sector and its position as a global tourism hub as bullish factors. Additionally, the French government's focus on green energy initiatives and technological advancements has fueled some optimism. Some analysts believe the CAC 40 is poised to benefit from a recovery in the global economy, particularly in the luxury and consumer sectors. In a July note, analysts at Saxo Bank highlighted the 7,900 to 8,000 mark as a potential area the CAC 40 could rally to.
The Bear Argument: Despite the bullish outlook, headwinds exist. Concerns over global economic growth and geopolitical tensions dampen investor sentiment for the CAC 40 and other markets. Additionally, the CAC 40's heavy weighting in the luxury sector makes it more susceptible to economic downturns. Slowing demand in the sector has impacted many luxury stocks recently. Some analysts warn of potential volatility in the index due to these factors.
In a recent article, Investtech, assessing the CAC 40 from a technical point of view, told investors that the “CAC 40 has broken the ceiling of the falling trend in the medium long term, which indicates a slower initial falling rate.” They added: “The index is testing resistance at points 7500. This could give a negative reaction, but an upward breakthrough of points 7500 means a positive signal. The index is overall assessed as technically negative for the medium long term.”
CAC 40 Top 10 Companies By Market Cap
The CAC 40 is reviewed quarterly, on the third Friday of March, June, September, and December.
| Company | Market Cap (As of August 18, 2024) |
|---|---|
| LVMH | €337.75 Billion |
| Hermes | €228.69 Billion |
| L'Oreal | €207.13 Billion |
| TotalEnergies | €143.10 Billion |
| Schneider Electric | €126.51 Billion |
| Sanofi | €123.46 Billion |
| Airbus | €109.48 Billion |
| EssilorLuxottica | €97.63 Billion |
| Air Liquide | €96.14 Billion |
| Safran | €82.83 Billion |
Top 5 Constituents
Who Should Buy the CAC 40
The CAC 40 index is made up of France’s biggest and most well-established companies, which gives it a unique investment profile compared to other markets. As a result, some types of investors may find the CAC 40 more attractive than others. Here are the investor characteristics that match well with the CAC 40:
European Economic Exposure: If you're looking to invest in the French and broader European economy, the CAC 40 is a good option. It's a great way to concentrate on this region, as France plays a significant role in European economic growth.
Luxury and Consumer Goods Focus: The CAC 40 is attractive to investors interested in the luxury and consumer goods sectors, as these industries are well-represented within the index.
Dividend Income Seekers: Many companies in the CAC 40 have a history of consistent dividend payments, which is great for investors seeking regular income.
Long-Term Investors: The CAC 40 can be a core holding for long-term investors due to the stability and resilience of French companies. It has a track record of weathering economic challenges.
Quality and Stability: The CAC 40 is made up of established, financially sound companies with strong market positions, which is appealing to investors who value quality and stability over high growth potential.
Indices – Daily Movers