While Bitcoin dozes, the CAC 40 closes its best semester in 20 years
By: Bharggavi Ssayee
July 9, 2021 10:12 PM
As Bitcoin and the crypto market appear to be in the throes of lethargy, US stock indices are relentlessly breaking new highs. And French equities are not left out. Thus, after reaching the 6,500 point threshold for the first time since September 2020, the CAC 40 has just recorded its largest increase in a first half for 20 years. The last time the French index recorded such a rise was during the boom in internet-related stocks: the dot com bubble in 1998.
A phenomenal increase, unparalleled since 1998
Due to the reopening of economies and advantageous monetary policies, the CAC 40 recorded the best performance of world stock market indices with an increase of 17.2%. Despite the decline recorded at the end of June, partly attributable to the closing of positions ahead of the summer holidays, the French index has settled comfortably above the level of 6,500 points. According to some analyzes, the ACC would be in a good position to cross its all-time high over the next 12 months.
We have to go back as far as the first half of 1998 to find a more successful start to the year than 2021. At the time, the CAC 40 had grown by more than 40% in 6 months, driven by the euphoria of the bubble internet.
With this performance of 17.2%, i.e. an increase of more than 1,000 points, the CAC 40 is well ahead of the European STOXX 600 index (+ 13.5%), but also the S & P500 (+ 14.3%) and the NASDAQ (+ 12%).
The CAC 40 driven by the luxury sector and industry
Over this first half of 2021, the best performance goes to the Saint-Gobain group with a 48% increase in its share price in 6 months. Saint-Gobain is one of the oldest French companies. Founded in 1665, the company specializes in the production and distribution of materials, especially for construction.
The group was able to take advantage of the reopening of economies and the rebound in demand for materials for construction and renovation, to reap record profits. Moreover, the group did not interrupt its dividend policy during the crisis, which made it a particularly popular stock for equity investors looking for a dividend yield.
The second best performance of the semester is attributable to Societe Generale, which recorded an increase of 46%. However, the real driving force behind the CAC 40 in the first half of 2021 was the luxury sector. All of its players have recorded record stock market performances, crossing their previous all-time highs on several occasions. The Hermès group leads its peers with an increase of 40%, followed by LVMH (+ 29%), Kering (+ 24%) and L’Oréal (+ 21%). And with the fashion week which opened in Paris on Monday July 5, the good health of luxury titles should be maintained.
French equities therefore post a much better first half than Bitcoin and digital assets. Indeed, the king of cryptocurrencies started his year around $ 29,000 and has stagnated for several weeks at around $ 34,000, an increase of “only” 26% since the start of the year.