CAC 40 Rises 1% Despite Rate Uncertainty, GDP Stagnation

(RTTNews) - French stocks climbed higher on Friday despite concerns about geopolitical tensions and uncertainty about interest rates. Investors digested France's second-quarter GDP data and a preliminary reading on inflation, in addition to keeping an eye on Fitch's assessment of the nation's sovereign rating due later in the day.

The benchmark CAC 40 was up 84.41 points or 1.01% at 8,404.28 about half an hour past noon.

Hermes International and Legrand moved up 3.6% and 3.5%, respectively. Shares of EssilorLuxottica climbed nearly 3% after the eyewear manufacturer commenced a new program to repurchase up to 5 million shares.

LVMH, Kering, Schneider Electric, Air Liquide, Renault, Stellantis, Societe Generale, Michelin, STMicroelectronics, AXA and Veolia Environment gained 1%-2%.

Engie, ArcelorMittal, Safran, TotalEnergies, Eiffage, L'Oreal, Saint-Gobain, Credit Agricole, Carrefour, Thales and BNP Paribas posted modest gains.

Pernod Ricard dropped nearly 2%. Capgemini eased by about 1.6%, while Orange drifted down nearly 1%. Danone and Publicis Groupe also showed weakness.

Data from INSEE showed France's economy stagnated quarter-on-quarter in the second-quarter, falling short of preliminary estimates of 0.2% growth, after contracting 0.2% in the previous period. Year-on-year, GDP growth expanded 0.7% in the second-quarter, slowing slightly from 0.8% in the preceding quarter.

The annual inflation rate in France accelerated to 2.4% in August 2026, the highest reading since May, up from 2.1% in July, according to preliminary estimates.

On a monthly basis, the CPI rose 0.7%, the most since April, compared with market expectations and July's 0.6% gain, as manufactured goods prices rebounded seasonally following summer sales, while energy and food prices also increased. The EU-harmonised annual inflation rate accelerated to 2.7% from 2.4%, while monthly HICP inflation rose to 0.8% from 0.6%.