French stocks struggled in negative territory on Wednesday morning, largely impacted by downturns in the luxury sector, notably due to LVMH's fourth-quarter revenue falling short of expectations. However, advances in the technology sector helped to mitigate the market's decline.
Investors are keenly anticipating the Federal Reserve's monetary policy announcement later today. The consensus is that the Fed will maintain current interest rates, with the accompanying statement being scrutinized for indications of future rate adjustments.
Attention also turns to the European Central Bank, which will release its policy update on Thursday. A 25-basis point rate cut is anticipated.
Earlier in the day, the CAC 40 benchmark fell to 7,849.14 but had slightly recovered to 7,875.05, registering a decline of 23.32 points or 0.3%.
LVMH shares plunged over 6% following a report of its 2024 net profit at 12.550 billion euros, a 17% decrease compared to 15.174 billion euros the previous year. The profit from recurring operations fell by 14% to 19.571 billion euros.
The company's 2024 revenue stood at 84.683 billion euros, a 2% drop from 86.153 billion euros, with organic growth reported at 1%. Despite the declines, LVMH highlighted continued organic growth amidst a challenging economic and geopolitical landscape, alongside a high comparative baseline due to significant post-Covid growth over recent years.
Elsewhere in the luxury sector, Kering fell 6.1%, L'Oreal declined by 2.6%, and Hermes International experienced a modest decrease of approximately 0.5%.
In other sectors, STMicroelectronics, Edenred, Pernod Ricard, ArcelorMittal, AXA, and BNP Paribas saw reductions ranging from 0.6% to 1.3%.
Conversely, Schneider Electric, after substantial losses over the past two sessions, rose by 5.1% this morning. Legrand demonstrated gains of 2.75%, while Unibail-Rodamco and Essilor increased by 1.5% and 1.2%, respectively.
