France's CAC 40 Edges Higher as Manufacturing Momentum Resurfaces

French equities showed modest upside momentum on Friday, with the CAC 40 index climbing 0.11% to reach 8,159.00 points during midday trading. The modest gains reflected a cautious investor stance as markets absorbed mixed signals from the broader economic landscape and geopolitical factors.

The session featured relatively subdued trading activity, as market participants remained selective following the holiday break. Earlier in the day, the CAC 40 had tested higher levels, reaching 8,221.78 before settling into a consolidation pattern.

Manufacturing Data Signals Potential Turning Point

A significant highlight came from manufacturing activity reports, where France demonstrated a notable reversal. The HCOB Manufacturing PMI rose sharply to 50.7 in December, up substantially from November’s reading of 47.8, marking the economy’s return to expansion territory after three consecutive months of contraction. This improvement represented the strongest monthly gain since June 2022, suggesting renewed optimism in the French industrial sector.

In contrast, the broader Eurozone painting a less encouraging picture. The HCOB Eurozone Manufacturing PMI fell to 48.8 in December, falling short of the preliminary forecast of 49.2 and November’s final level of 49.6. This decline signaled the fastest contraction pace since March, highlighting divergence between France’s resilience and broader regional weakness.

Individual Stocks Drive Market Breadth

On the equity side, semiconductor heavyweight STMicroElectronics rallied 3.75%, leading the gainers. Automotive major Stellantis climbed nearly 2%, while aerospace and defense names like Safran advanced 1.75%. A broad array of blue-chip names including Airbus, Kering, Engie, Capgemini, Orange and ArcelorMittal each posted gains between 1% and 1.5%.

Among other gainers, Thales, TotalEnergies, Renault, Societe Generale, Carrefour, BNP Paribas, Bouygues and Unibail Rodamco edged higher, moving up 0.35% to 1%.

Weakness emerged in defensive and consumer-oriented sectors, with Saint Gobain, Air Liquide, Accor, Eiffage, Danone, L’Oreal, EssilorLuxottica, LVMH and Bureau Veritas each declining between 0.4% and 1%.

The mixed performance underscored how markets continue to balance optimistic signals from select economic data against persistent uncertainties and thin holiday-period liquidity.