Geopolitical Escalation in Strait of Hormuz Drags CAC 40 Lower

The CAC 40 fell 1.14% on Monday, dropping 95.81 points to 8,329.32, as investors reacted to a sharp deterioration in U.S.-Iran relations. The downturn follows Iran's refusal to participate in a second round of peace talks, citing excessive U.S. demands and a continuing naval blockade. Tensions escalated further after the U.S. seized an Iranian-flagged cargo ship, prompting Tehran to launch drone attacks against American military ships. The closure of the Strait of Hormuz, a critical chokepoint for global oil supplies, has triggered a rise in energy prices and renewed concerns regarding inflation and central bank interest rate trajectories. Industrial and luxury stocks bore the brunt of the sell-off. ArcelorMittal fell 3.7% and EssilorLuxottica dropped 3.5%, while other heavyweights including LVMH, Airbus, and Stellantis saw losses between 2% and 3%. Conversely, energy giant TotalEnergies gained over 2%, benefiting from the surge in oil prices, while Orange rose nearly 2%. Adding to the macroeconomic pressure, new data from Eurostat revealed that Eurozone exports decreased for the second consecutive month. Exports fell 6.7% year-on-year in February, a slight improvement from the 7.7% decline recorded in January. Imports also dropped 2.2% compared to the previous year.