French Stock Market Defies Chaos With 5-Day Winning Streak Amid Nationwide Riots

The French stock market, as represented by the CAC 40 index, has risen for five days this week, gaining 3.3% and marking the best weekly performance since the end of March.

This occurred despite the fact that nationwide protests have erupted in recent days, with images of burning streets and police use of tear gas capturing the attention of the world, highlighting the deep divisions and tensions within French society.

The police shooting death of a 17-year-old boy of Algerian descent in Nanterre, a Paris suburb, sparked widespread protests across the French capital, with protesters demanding justice and an end to police brutality.

As riots ravaged the nation, over 400 people were arrested on Thursday, and a bank in Nanterre was set on fire. Over 40,000 police officers were deployed, and public transportation was strained.

All of this turmoil had virtually no negative impact on the performance of French companies in the stock market.

Chart: French CAC 40 Index Rises For The 5th Straight Day, Eyes Prior All-Time Highs Set in April

Why Are French Stocks Ignoring The Civil Unrest?

The CAC 40 index, tracked by the iShares MSCI France ETF EWQ, is predominantly represented by luxury brands that generate a significant portion of revenues from international markets.

LVMH Moët Hennessy – Louis Vuitton, Société Européenne LVMHF, the conglomerate of luxury product brands such as Louis Vuitton, Moët & Chandon, Hennessy, Dior, Dom Pérignon, Givenchy and others, and headed by by the world’s richest man, Bernard Arnault, accounts for 14% of the CAC 40 Index.

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France contributed only 8% of LVMH’s total revenues in 2022, totaling 6 billion euros ($5.9 billion). Revenues of 21.5 billion euros, or 27%, came from the United States, making it the second-largest market after Asia.

L’Oréal S.A. LRLCY, another CAC 40 heavyweight, generates only a small portion of its revenue domestically, with more than three quarters coming from outside Europe.

Thus, the international focus that characterizes French luxury brands has effectively created a protective shield against the impact of domestic political and social upheavals in the country where the brands are headquartered.

LVMH Revenues By Region In 2022

Region	Revenue (in millions of euros) in 2022	Share
United States	21,542	27%
Asia ex-Japan	23,785	30%
Europe ex-France	12,717	16%
Other markets	9,632	12%
Japan	5,436	7%
France	6,071	8%
Total	79,184	100%

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French police at a May Day protest earlier in 2023. Photo via Shutterstock.