European stocks opened the markets higher on Tuesday. The French CAC 40 index was in the green after an improvement in the country’s GDP for the second quarter. Germany’s DAX index was also up after a decline in the unemployment rate for August. UK’s FTSE 100 index was at a standstill as Euro Stoxx 50 edged slightly higher.
French Inflation Outlook
In the second quarter of 2021, France’s gross domestic product (GDP) rose 1.1% after remaining stable at 0.0% in the first quarter. The Q2 GDP stood 3.2% below its level in Q4 2019, as compared to 4.3% in the last two quarters.
Final domestic demand advanced 1.2%, while gross fixed capital formation significantly accelerated by 2.4%, making a positive contribution to the GDP growth. Households’ consumption expenditure jumped 1.0%; however, remains 5.9% below its pre-pandemic level.
Foreign trade negatively contributed to the GDP growth as imports increased 1.7% as exports rose 1.0%. Foreign trade remained below its pre-crisis level.
Over a year, the Consumer Price Index (CPI) rose 1.9% in August 2021. A rebound in manufactured good prices linked to the end of summer sales contributed to the increase in inflation. Food and energy prices also inched higher, while the prices of services recorded a slight increase.
Over a month, the consumer prices rose 0.6% in August. The prices of manufactured goods took a sharp rebound in August.
The Harmonized Index of Consumer Prices (HICP) rose 2.4% YoY and 0.7% MoM. The improvement in the inflation and GDP data indicate a gradual economic recovery growth.
CAC 40 Performers
STMicroelectronics was the best performer in the CAC 40 index. The semiconductor manufacturing company gained 1.45%. The company recently announced the status of its common share repurchase program.
Essilor Luxottica is an Italian French vertically integrated multinational corporation. The company was up 1.30% after announcing the launch of a share buyback program.
Legrand is a French industrial group historically based in Limoges in the Limousin region. The company rose 1.11% as analysts project
Safran SA led the drags in the CAC 40 index. The aerospace company slipped 2.01% as the air travel sector struggles to recover amid the resurgence of the coronavirus infections.
WFD Unibail Rodamco was also among the laggards, falling 1.25%. Unibail Rodamco is a European commercial real estate company.