CAC creeps higher

French stocks are in positive territory and confidence is seeping back into the market after last week’s selloff.

France’s equity benchmark is trading at 4165, up 0.5%, pushed higher by a combination of short-covering and bargain-hunting. A lack of bad news from Argentina and Turkey has prompted dealers to buy back into the market. There is a sense of cautious optimism in the European equity market, but if the fear of a default by an emerging-market economy returns we could see a similar fall to that witnessed on Friday.

There is little in the way of the economic news from the eurozone today. The Federal Reserve starts its two-day meeting tonight, and there will be an announcement tomorrow. In December the Fed reduced the size of the stimulus package from $85 billion per month to $75 billion per month, and the consensus is for another trimming of $10 billion tomorrow.

The CAC has managed to stay above the 4120 support level and, as Alastair McCaig explained, it could head towards the 4220 level. If it were to breach this support level, it might continue towards the 4060 mark.

France 40 chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.