CAC 40 Falls Nearly 2% On Widespread Selling

(RTTNews) - French stocks opened with a negative gap Monday morning and shed further ground before recovering a bit with a few counters attracting modest buying activity.

The levy by the Trump administration has raised fears of a potential trade war and concerns about global economic outlook.

The benchmark CAC was down 149.63 points or 1.88% at 7,800.54 a few minutes ago.

The sell-off in the market comes after U.S. President Donald Trump followed up his threat and imposing punitive tariffs on Canada and Mexico, effective Saturday (February 1). A levy of 10% will take effect on February 5th.

Trump has warned that the EU and UK could be the next targets for the levy.

Shares from automobile and technology sectors are among the worst hit. Shares from banking and luxury goods sectors are hurt as well.

Stellantis is tumbling is plunging 7.4%. STMicroelectronics is lower by about 5.1%, while ArcelorMittal, Saint-Gobain, Teleperformance, Kering, Edenred,Legrand and Schneider Electric are down 3 to 4.5%.

Societe Generale, LVMH, Capemini, BNP Paribas, Pernod Ricard, L'Oreal and Michelin are declining 2 to 2.7%.

On the economic front, the HCOB France Manufacturing PMI came in at 45 in January 2025, slightly lower than initial estimates of 45.3, but up from 41.9 in December, according to a report released by S&P Global today.

The euro area manufacturing sector shrank at a slower pace in January as contractions in output, orders, inventories and purchasing activity slowed, final survey results from S&P Global showed.

The final HCOB manufacturing Purchasing Managers' Index rose to an eight-month high of 46.6 in January from 45.1 in December. The flash reading was 46.1.

Although the reading was below the critical 50.0 threshold, it signaled the softest fall since May last year.