Traders are starting to become much more bullish on French blue chip stocks, according to latest data from a leading European retail derivatives platform.
Spectrum Markets, a pan-European trading venue for securitised derivatives, has published its SERIX sentiment data for European retail investors for August, showing a steady rise in sentiment towards the CAC 40 since the beginning of the year. The French benchmark index comprises the 40 leading French companies traded on the Paris Stock Exchange.
The SERIX value indicates retail investor sentiment, with a number above 100 marking bullish sentiment, and a number below 100 indicating bearish sentiment.
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While the CAC 40 index itself remained fairly stable, trading between 7,000 and 7,500 throughout most of the year, monthly sentiment towards the index started off bearish in January at 80 points and hit 100 in August for the first time this year, as optimism improved.
Market opinion
“Retail investors have watched some major events unfold in France this year, not least Macron’s pension reforms in April, passed despite massive criticism and aiming to give the French national budget better stability. After the protests faded out in May, retail investors were given further cause for optimism as GDP increased by 0.5 percent on the previous quarter, driven in particular by exports,” said Michael Hall, Head of Distribution at Spectrum.
Luxury goods have benefitted from steadily rising global demand, and investors have seen this play out in the CAC 40 where the largest stocks in the index, in terms of market capitalization, are the luxury goods and cosmetics manufacturers LVMH, L’Oréal and Hermès.
LVMH is currently the most valuable group in the euro zone, following a brilliant share price rally over the last five years, while Hermès showed an even more impressive performance, which has also pulled up the CAC 40.
Spectrum August data
In August 2023, 161.9 million securitised derivatives were traded on Spectrum, with 32.6% of trades taking place outside of traditional hours (i.e., between 17:30 and 9:00 CET).
87.3% of the traded derivatives were on indices, 9.1% on currency pairs, 2.7% on commodities, 0.8% on equities and 0.1% on cryptocurrencies, with the top three traded underlying markets being DAX 40 (26.1%), S&P 500 (23.9%), and NASDAQ 100 (21.9%).
Looking at the SERIX data for the top three underlying markets, the DAX 40 and the NASDAQ 100 both moved out of the bearish zone at 100 and 101 respectively, and the S&P 500 increased from a bearish 89 to a neutral 99.
