Earnings lift Paris despite sovereign debt concerns
The Paris benchmark added 83.04 points, or 1.05%, to Wednesday's 7,886.96 close, according to Euronext Paris figures published by Zonebourse. About 64.9 million shares changed hands. An opening advance of roughly 0.7% took the index to 7,944, and it approached 7,980 around midday before easing after the ECB decision and Wall Street's opening.
US markets had provided support the previous evening after the Federal Reserve left its target range at 3.75% to 4%. Paris had barely moved on Wednesday: a roughly 15% surge in Stellantis countered losses in Dassault Systèmes, leaving the CAC 40 down just 0.18 points ahead of the central bank decisions.
Thursday's advance ranked among Europe's strongest, but it did not erase France's losses for the year. Zonebourse data put the CAC 40's year-to-date decline at about 2.3% during the session, compared with a gain for Germany's DAX 40.
Air Liquide, Société Générale and Airbus advance
Air Liquide was up about 3.2% around midday after revenue exceeded expectations, supported by electronics and industrial merchant gases, according to Boursorama. The company also reaffirmed its targets for 2026 and 2027.
Ideal Investisseur reported Air Liquide's third-quarter revenue at 7,259 million euros, a 3.0% increase on a comparable basis and a 10.0% rise on a reported basis. The company said the first 1 billion euro tranche of its share buybacks would begin on October 30. That tranche forms part of the 4 billion euro program announced with its Beyond plan on October 5.
Société Générale's results beat profit expectations as equities trading compensated for continued weakness in fixed income. Its results release and Newsquawk put third-quarter group net income at a record 1.9 billion euros and return on tangible equity, or ROTE, at 13.0%. Nine-month net income also reached a record, at 5.4 billion euros, up 17.3% from a year earlier. The bank increased its full-year ROTE target from above 10% to above 11%.
Airbus gained more than 3% while retaining its full-year outlook, according to Trading Economics and BFM Bourse. Its quarterly revenue was 17.47 billion euros against a consensus estimate of 17.91 billion euros, Newsquawk reported. Net income totaled 1.34 billion euros, adjusted EBIT was 1.77 billion euros and earnings per share came to 1.70 euros.
Higher oil prices and refining margins helped TotalEnergies deliver a sharp increase in net income, which French financial media characterized as a record profit. Renault also exceeded revenue forecasts while favoring its most profitable sales in a highly competitive market.
Renault's total quarterly sales increased to 11.60 billion euros from 11.43 billion euros a year earlier, although automotive revenue was unchanged at 9.84 billion euros, according to Newsquawk. The automaker maintained its 2026 outlook. Separately, Sopra Steria lifted its annual revenue target, pointing to growth in defense, security, space and cybersecurity.
Technology weakness and company-specific setbacks
Alphabet's third-quarter earnings miss renewed concerns about artificial intelligence spending and weighed on technology stocks. European chip shares came under pressure even as STMicroelectronics reported a 17.9% year-over-year revenue increase.
Newsquawk reported STMicroelectronics revenue of $3.76 billion, a gross margin of 37.3% and net profit of $291 million, short of the $343 million consensus. The company forecast approximately $4.15 billion in fourth-quarter revenue.
Stellantis lost around 3%, surrendering some of Wednesday's roughly 15% gain after Jefferies lowered its price target. Pluxee also fell after setting a 2027 recurring EBITDA target of at least 440 million euros.
Jefferies analysts had expected Pluxee's shares to decline. According to Médias24, they cited Brazilian regulatory headwinds that were expected to affect 2027 and leave forecasts substantially below consensus.
ECB leaves rates unchanged as leadership transition approaches
The ECB kept its deposit rate at 2.50%, meeting expectations six weeks after September's increase. Hours before that decision, Lagarde announced that she would leave on February 7, 2027, about nine months before the scheduled end of her eight-year term. The ECB said the Governing Council thanked her with a prolonged standing ovation.
At the subsequent press conference, Lagarde described a debate over whether to raise rates. She also pointed to growing indirect effects from the energy price surge and a clear increase in long-term financing costs since September, according to FXStreet. Trading Economics reported that markets still priced in a rate increase by December.
CNBC identified Spain's Pablo Hernández de Cos and the Netherlands' Klaas Knot as widely viewed leading candidates to replace her. The transition extends beyond the presidency: Chief Economist Philip Lane and executive board member Isabel Schnabel, whose responsibilities include market operations, are also scheduled to leave in 2027. Several senior positions will therefore need to be filled during the succession process.
French politics and bond stress frame Lagarde's departure
The timing is particularly significant for France, where Lagarde previously served as finance minister. Her February departure precedes the April 2027 presidential election. CNBC cited polling that placed far-right candidate Marine Le Pen in the lead, while Aberdeen Investments economist Felix Feather noted that the early exit would leave the next French president without a role in selecting the next ECB president.
Bloomberg, in a report carried by ANSA, said Lagarde wanted more freedom to address matters beyond monetary policy. It reported that she had told the Governing Council she could not stay neutral in light of political developments in France before the election.
France is also facing a bond-market crisis. AFP reported government borrowing costs at their highest level since 2002. On October 23, CNBC reported that the French-German 10-year yield spread had passed 170 basis points for the first time since the euro zone debt crisis of the early 2010s. France's debt-to-GDP ratio was 119% at the end of the second quarter, and the government had reduced its 2026 growth forecast to 0.5%.
Political and fiscal uncertainty has sustained the premium investors demand to hold French debt and has been a major factor in the CAC 40's underperformance. Going into Wednesday's session, Zonebourse put the index's year-to-date loss at roughly 3%, while the DAX had gained more than 4%.
Higher sovereign borrowing costs also affect household and business financing, weighing on domestic growth and the valuations of rate-sensitive real estate, utility and bank stocks. Thursday's earnings-led advance did not resolve that pressure. For French equities, unresolved questions include the ECB's response to widening French spreads and the next ECB president's willingness to use the Transmission Protection Instrument.
DAX leads Europe as the euro weakens
Germany led the regional gains, with the DAX 40 adding 1.31% to reach 26,039.68, its highest close in seven weeks. The Euro Stoxx 50 finished at 6,207.07, up 0.64%.
Shell's strong results helped London's FTSE 100 rise 0.26% to 10,722.07. In Milan, weakness in Italian banks limited the FTSE MIB to a 0.36% gain, leaving it at 50,002.36.
FXStreet reported that the euro touched a 17-month low against the dollar after the ECB's hold and an acceleration in US PCE inflation. Currency weakness generally benefits French exporters in luxury goods, aerospace and spirits because overseas sales translate into more euros.
Friday's calendar and CAC 40 levels
The next session brings the Bank of Japan's decision and investors' response to Amazon's earnings, scheduled for release after Thursday's US market close. Further French corporate reports are also due, while the domestic budget debate remains the principal local driver of bond yields.
The CAC 40's midday high near 7,980 marks the first technical resistance level, followed by 8,000. A close above that threshold would take the index back to levels last reached in September. On the downside, support stands at Wednesday's 7,886.96 close and then 7,847, the closing level on October 26.
