CAC 40

The CAC 40 is the benchmark equity index for the French stock market, composed of the 40 most-significant companies listed on Euronext Paris by free-float market capitalisation and trading liquidity. Despite the modest number of constituents, the CAC 40 captures one of the most economically-influential blue-chip baskets in Europe. The index is uniquely heavy in two themes: global luxury (LVMH, Hermès, Kering, L'Oréal, Christian Dior — collectively around 20% of index weight) and globally-recognised consumer-staples brands (Danone, Pernod Ricard).

Because of the luxury concentration, the CAC 40 functions as the world's most direct equity proxy for global high-end consumer-discretionary demand — particularly Chinese consumer demand, which accounts for an estimated 30-40% of LVMH and Hermès revenue. A 5% pullback in Chinese consumer confidence frequently translates into a sharp single-day CAC drawdown, even when the broader Eurozone economy is healthy. Reading the CAC alongside the Shanghai Composite gives a more complete picture than reading either in isolation.

The CAC 40 was created on 31 December 1987 with a base level of 1,000 — making the index quite young compared to peers like the FTSE 100 (1984), DAX (1988) and S&P 500 (1957). The name 'CAC' originally stood for Compagnie des Agents de Change, a stock-broker syndicate dissolved in 1988; the abbreviation is retained for historical continuity. The index is calculated and disseminated by Euronext Paris.

Notable history: peaked at 6,944 in September 2000 during the dot-com bubble, took 21 years to retake that level (finally crossing 7,000 in November 2021), broke 8,000 in early 2024. Major drawdowns: 2000-2003 (-65%), 2008-09 (-55%), 2011 Eurozone crisis (-31%), 2020 COVID-19 (-38%), 2022 Russia-Ukraine (-19%).

CAC 40 trades on Euronext Paris. The FCE futures (also on Euronext) provides extended-hours discovery. In IST:

When reading the CAC tape, three lenses to apply. First, the luxury lens: a 1% move in LVMH alone shifts the CAC by ~0.1%. Second, the China lens: monitor the Shanghai Composite and the offshore CNH (USD/CNH) — a weakening yuan often presages CAC luxury-led weakness. Third, the ECB lens: French banks (BNP Paribas, Société Générale, Crédit Agricole) and insurers (AXA) are ~13% of index weight; ECB rate decisions move them sharply.

Seasonal pattern: the CAC traditionally exhibits a strong 'October low, year-end rally' pattern — its average October close is typically the lowest of the year, followed by November-December gains. This pattern has held over ~70% of years since 1990.