CAC 40 Falls Ahead of Moody’s France Rating Review

The CAC 40 fell 0.4% to close at 7,783 on Friday ahead of Moody’s review of France’s sovereign credit rating. Moody’s rates France Aa3, its fourth-highest grade, with a negative outlook, and a downgrade is widely expected. The 10-year government bond yield surged to a 24-year high as concerns grew over fragile public finances, rising borrowing costs and mounting social unrest. The minority government faces difficulties passing its budget and reducing the deficit amid parliamentary divisions, widespread protests and uncertainty ahead of the presidential election. Meanwhile, heavyweight companies reported Q3 results this week. Hermès fell after reporting revenue below expectations, while Kering plunged 16.6% following a sales decline. Safran sank 10% despite strong results. In contrast, L’Oréal climbed 5.6% after third-quarter sales beat expectations. On the week, the CAC 40 gained 0.2%.