In August there was talk of “unprecedented profits” in view of the strong half-year figures of many large French corporations.

This shows how much the economy is picking up again after the heavy losses in the Corona crisis.

In the meantime, however, the summer euphoria has evaporated.

As in Germany, the worry lines on the Paris stock market have deepened in the past few weeks.

Nobody really likes to speak of an upward trend at the moment.

Niklas Záboji

Business correspondent in Paris

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The leading index CAC 40 has moved away from the almost 6900 points achieved in mid-August. Since then it has been moving sideways, with a downward trend. The week started the CAC 40 with around 6550 points. Unlike in the summer, it is unlikely that France's leading index will rise to an all-time high this year, like the Dax - although it should be borne in mind that the CAC 40 is a pure price index. In contrast to the Dax performance index, dividend payments are not included. At first glance, this may make it appear weaker than it is.

As everywhere else, scarce preliminary products and increased inflation are causing displeasure for investors.

According to the national calculation method, the latter was 2.1 percent higher in France in September than in the previous year - noticeably less than in Germany, but still noticeably more than one was used to in recent years.

France's statistical office Insee last week spoke of a rapid recovery “under tension”.

The rise in production costs for industry and the agricultural sector is as much as 10 percent within a year.

The challenge for investors will be to measure the impact of rising costs on the balance sheets and, above all, the forecasts of listed companies, says Christopher Dembik of Saxo Bank - and warns: "There will be unpleasant surprises."

There can be no question of a downward pull

The recent losers on the Paris Stock Exchange include luxury stocks. Hermès' share price has fallen by almost 10 percent since mid-August. In the case of LVMH, famous for brands such as Louis Vuitton and Christian Dior, the minus is 12 percent, in the case of the fashion company Kering even 20 percent - a single top in the CAC 40. One reason is that tourists who are keen to buy are likely to return from China after all is still a long time coming. Parisian fashion and department stores are suffering from this.

As an example of the stagnation in the luxury sector, LVMH presented figures for the third quarter of 2021 on Tuesday. Although this signaled growth, it was at a similar level as in the first half of the year. Sales in the first nine months of the year amounted to 44.2 billion euros, an increase of 11 percent compared to the same period in 2019. Compared to the previous year, when department stores were mostly closed, the company's organic sales grew by 40 percent.

But things are going better in many other branches of the French economy. There can therefore be no question of a downward pull. The vaccination campaign is running successfully, but another lockdown is not in the offing. If economic output slumped by 8 percent last year, Insee recently revised its forecast for this year even further upwards to 6.25 percent. That would be more than twice as much as can be expected in Germany.

France's economy benefits from the fact that it is much less dependent on ailing industry and sluggish foreign trade.

According to Insee, it could reach the pre-corona level by the end of the year.

That also boosts the job market.

The unemployment rate is trending towards 7.6 percent at the end of the year.

That would be the lowest level since the financial crisis.

Private consumption is also developing well after the terrible year 2020.

On the stock exchange, bank stocks are still among the winners.

The stocks of BNP Paribas, Société Générale and Crédit Agricole rose since mid-August.

The energy supplier TotalEnergies is also doing well.

At the same time as the galloping electricity and gas prices, its share price began to skyrocket.

However, the example of Alstom shows that fundamental, long-term assessments are not always behind the latest price movements.

In the last half of the year, the train manufacturer's share price fell by 30 percent.

Investors didn't like the fact that the takeover of Canadian competitor Bombardier will be a bit more expensive and complicated than expected.

Nevertheless, analysts firmly assume that the integration of Bombardier will succeed and that the TGV producer will grow in the coming years.

After all, Alstom benefits like hardly any other company from the promotion of buses, trains and hydrogen.