FRA40

The FRA40, also referred to as CAC 40, is a French stock market index made up of the 40 largest stocks listed on the Paris stock exchange. It is one of the main national indices managed by the Euronext group that operates the world’s most liquid pool of exchanges across Europe, including Paris.

The value of stocks within FRA40 is ranked by free-float market capitalization, measuring only stocks available for public trading and adjusted quarterly.

Some of the most well-known companies holding a seat in this index are Accor, Air France-KLM, L'Oréal, Michelin and Carrefour. The international exposure and global reach of most companies in the FRA 40 make this index particularly attractive for traders and investors around the world.

Due to its international nature, the FRA40 is particularly sensitive to the euro exchange rate and hence to the monetary policy of the European Central Bank (ECB). A weak Euro increases the competitiveness of French exports, while a strong Euro, on the other hand, makes imports from outside of the Eurozone cheaper.

The performance of individual companies within the index also plays a significant role in the overall index value and depends on various factors within a company's industry. For example, commodity prices (particularly oil) affect TotalEnergies, a giant petroleum corporation.

With France being the second largest economy in the EU, the FRA40 is quite sensitive to socio-political events, such as presidential elections or Brexit, and worldwide crises, such as COVID-19 or the Russian invasion of Ukraine.