Paris, March 12 – The Paris Stock Exchange continued its downward trend on Wednesday, as persistent uncertainty stemming from the Middle East conflict and volatile oil prices weighed on market sentiment. This decline follows a temporary rebound observed on Tuesday.
CAC 40 Drops by 0.85%
As of 09:50 AM (Paris time), the CAC 40 index had fallen by 0.85%, reaching 7,987.31 points, representing a decrease of 65.30 points. Analysts at Natixis noted that “uncertainty remains” as the primary driver of market movements.
Middle East Conflict Continues to Impact Global Markets
For over ten days, global markets have been reacting to the unfolding conflict in the Middle East, which began with Israeli-American strikes on Iran, followed by retaliatory actions from Tehran against several countries in the region.
On Tuesday, the Parisian benchmark index had seen a rebound of +1.79% after several sessions of decline. This temporary recovery was spurred by U.S. President Donald Trump’s assertion that the conflict was “almost” over, which temporarily led to a drop in oil prices.
Oil Prices Remain Volatile
Hydrocarbon prices have been on an upward trajectory since the conflict began, with crude oil briefly touching nearly $120 per barrel earlier this week before falling back below $90. This volatility is attributed to disruptions in the Strait of Hormuz, a critical chokepoint through which 20% of global oil production transits.
Andreas Lipkow, an analyst for CMC Market, commented, “Events related to the war in Iran continue to accelerate and remain very difficult to predict.”
Markets are currently awaiting announcements from the International Energy Agency (IEA), which may propose a massive release from strategic oil reserves to curb soaring prices, according to the Wall Street Journal. Roland Lescure, the Minister of Economy, has already indicated that a G7 meeting of heads of state via video conference on Wednesday will “undoubtedly address” the issue of strategic reserves.
Interest Rates Climb Amid Inflation Fears
Another indicator of persistent tensions is the rising interest rates on sovereign debt for European countries. This surge reflects concerns about a potential resurgence of inflation across the continent, fueled by the spike in energy prices.
As of 09:50 AM GMT, the ten-year interest rate on French debt reached 3.51%, up from 3.44% at the close of the previous day. Prior to the onset of the conflict in Iran, this rate hovered around 3.20%.
Its German equivalent, a European benchmark, reached 2.88%, compared to 2.83% on Tuesday evening. Higher inflation diminishes the real value of payments made by a borrower to creditors, prompting creditors to demand higher interest rates to offset this loss.
The European Central Bank (ECB) is facing increased pressure to maintain a restrictive monetary policy, without interest rate cuts, in light of this situation. Christine Lagarde, President of the ECB, stated on Tuesday that the monetary institution would do everything “necessary” to keep “inflation under control” in the face of surging energy prices.
Eurazeo Sanctioned by Market Trends
Investment company Eurazeo reported a loss of 403 million euros in 2025, a slight reduction compared to the previous year. The company’s performance was negatively affected by the decline of the dollar, despite a record fundraising effort, as announced on Wednesday.
Its share price fell by 4.40% to 42.98 euros in Paris.
Source: Euronext CAC40, AFP
