The CAC 40 stock index has experienced ups and downs, breaking records and sometimes surpassing itself, while at other times undergoing upheavals due to economic, political, or global crises, such as inflation, COVID-19, political crises in the eurozone, etc.
However, the CAC 40 always manages to achieve strong performances and to reward its member companies and investors of all types. Investing in the CAC 40 is an opportunity to access the largest companies in the eurozone and benefit from their growth, but the key lies in the chosen investment strategy and the timing of opening or closing positions. It requires a good trader who is passionate, strategic, and especially good at managing emotions and the risk of loss in order to quickly regain the profitability of their investment.
In this article, we will discuss the performance of this index in general and specifically its achievements at the beginning of 2023.
A Record Broken by the CAC 40
The COVID crisis caused the French stock market to fall to 4,500 points in 2020, and the previous peak of 6,000 points seemed unattainable due to this crisis and its economic repercussions. However, the French CAC 40 index quickly turned the page.
At the beginning of 2021, this index experienced an upward trend that allowed it to surpass 6,000 points and brush against 7,100 points at the start of 2023.
The performances recorded at the end of 2022 and the start of this year seem promising. Let’s take a closer look!
Evolution of the French Stock Market and Its Components
French stock indices are making a comeback. The CAC 40 reached this record mainly thanks to Thales, Kering, Danone, and Pernod Ricard. The last recorded prices of these brands are 123.4, 566.6, 50.28, and 186.55, respectively.
Moreover, in 2023 the annual rate of change is 9.63% compared to -9.5% in 2022.
However, some companies are dragging this index down as a result of poorly thought-out decisions or declining performances, notably the groups Veolia, Saint Gobain, Arcelormittal, and especially Renault, which occupies the last place on the list of the 40 famous companies.
The Luxury Sector Gives a Boost to the French Stock Market
After finishing on a high note again last Friday and surpassing 7,000 points for the first time since February 11, 2022, the Paris Stock Exchange is off to a good start in 2023. Indeed, the CAC 40, following the rise of Asian markets, has gained 8.49% since January 1, including 2.37% last week.
Despite economic headwinds that weren’t deemed favorable, the flagship stock index gained 47.82 points to reach 7,044.10 points. This increase aligns with bank forecasts.
This index, considered a mirror of the French stock market, is experiencing a strong rise for various reasons, including the luxury sector benefiting from the lifting of restrictions in China.
Having benefited from exceptional stock performance at the end of 2022, which continues into early 2023 thanks to the easing of health restrictions in China, the luxury sector is currently boosting the CAC 40. LVMH registered a 12% gain, setting a new record. Its share rose by 1.50%, while Hermès climbed by 2.20%.
Although some economists had pessimistic forecasts concerning the CAC 40 since its downfall, its results prove the complete opposite and seem to promise better performances in 2023. Investing in the CAC 40 index offers various advantages, such as risk management, investing in well-known European and international companies, and especially diversification. Indeed, the invested funds will be placed in 40 high-performing companies. These 40 companies belong to different sectors of activity, such as pharmaceuticals, textiles, banking, aerospace, food, construction, technology, automotive, and many others. The year 2023 might just be the year to invest!
