The CAC 40 index is up by more than 1.50% today as traders refocus on the relationship between the US and France. The index has also risen in response to data that showed that the number of Covid-19 cases in France has started to fall.
Similarly, in the UK and Germany, the FTSE 100 and DAX index are all up by more than 1%.
All companies in the CAC 40 index are in the green today, with Sanofi being the worst-performing. The drug-makers’ shares are up by 0.30% and is followed by EssilorLuxottica, Orange, Pernod Ricard, and Teleperformance that are all up by less than 1%.
On the other hand, the best-performers in the CAC index are STMicroelectronics, Societe Generale, Airbus, Credit Agricole, and Renault that are all up by more than 3%.
France equities are rising as traders react to the US election and Joe Biden, the eventual winner. They specifically look forward to better relations between the two countries considering that Trump and Macron had an on and off relationship. During the campaign, Joe expressed his hopes of improving his relations with key American allies, including France.
At the same time, CAC companies are set to benefit by the fact that the US will not add any tariffs on its products. Indeed, investors were already pricing-in the escalation of a transatlantic trade conflict if Donald Trump won a second term.
Also, France stocks are rising because of an improvement in Covid infections in France. According to the country’s health officials, the number of new infections in France dropped to a low of 38,619 on Sunday. That was more than half what they reported on the previous day.
CAC 40 technical outlook
On the daily chart, we see that the CAC 40 index has been in the green in the past few days. That has seen the index move from a low of €4,463 on October 30 to today’s high of €5043. That price is the highest it has been since September 14. It is also slightly above the 25-day and 50-day exponential moving averages. It is also slightly below the 61.8% Fibonacci retracement level.
Therefore, the index will possibly continue rising as traders aim for this retracement at €5,125. On the flip side, a move below the 50% retracement at €4,818 will invalidate this trend.
CAC index technical chart