March 2026 will go down as the month when the CAC 40 landscape turned upside down. After hitting an all-time high of 8,642 points on February 26, the Paris index corrected violently under the pressure of the Iran/USA-Israel war, losing almost 13% in just a few sessions to now hover around 7,500 points. And in the process, the entire Paris Bourse hierarchy was turned upside down. 🚀
🔍 What's going on?
For years, the CAC 40 was all about LVMH, Hermès and luxury at the top of the bill. In March 2026, the picture looks more like a battlefield. LVMH has fallen 28.5% since the start of the year, weighed down by a persistent slowdown in Chinese purchases in Japan and sluggish momentum on the continent. The number one in luxury goods has lost its crown as top capitalization, slipping to 228.7 billion euros. Hermès is holding up better thanks to its ultra-high-end positioning, but at 169.6 billion, the saddler is now outstripped by TotalEnergies (176 billion), which invites itself onto the podium for the first time in years.
On the oil side, in fact, the surge is spectacular: TotalEnergies has jumped around 45% since January, buoyed by a barrel that hasn't come down since the Strait of Hormuz was partially blocked. Morgan Stanley put it in black and white: "Regardless of where events go from here, the past four weeks have changed the way investors should think about the Strait of Hormuz." Translation for portfolios: oil has once again become a strategic asset, not an old relic of the old world.
L'Oréal, second-largest capitalization at 188 billion, is now clearly in the sights of TotalEnergies. And the big question stirring Parisian trading rooms: can the oil major go after LVMH (€228.7 bn) and regain the top cap' spot on the Paris Bourse it lost nearly ten years ago? It's no longer science fiction.
💡 Why does it matter?
This rotation is anything but a short-term technical move. It's a paradigm shift. In the post-Covid decade, institutional money massively chased quality growth stocks - and French luxury ticked all the boxes: fat margins, pricing power, China exposure, iconic brands. But in 2026, two things will break this mechanic: Chinese consumption, which is not picking up again, and a geopolitical crisis that brutally puts "strategic" assets (energy, defense, raw materials) back at the center of the game.
And not all analysts are buried on luxury. Citi wrote in mid-March that LVMH offered "an entry point to position on the accelerating growth expected this year", with a price target of 621 euros - a potential of over 30% on the share. Royal Bank of Canada also considers valuations on LVMH and Hermès "attractive".
Watch out for the next few weeks: the duration of the conflict. Frédéric Rozier (Mirabaud) sums it up well: "If the conflict ends in a week or two, luxury will bounce back. If it drags on for another three weeks or even a month, TotalEnergies will take the lead." In short, the next CAC 40 sequence will play out as much in Tehran as in Paris.
📊 Our opinion
On this one, we're rather cautious - and that's a change for us. Buying the LVMH trough at current levels has a certain charm. The stock is trading well below its historical average, analysts are lining up positive ratings, and historically, phases of capitulation on luxury have often been good entry points. But you don't buy a stock just because it's down 28%. You need a catalyst, and for the moment, we don't see one until the Q1 results in mid-April.
Inversely, chasing TotalEnergies at +45% YTD is the kind of bet that ends badly when geopolitics suddenly calm down. The day a serious ceasefire is announced, expect a blood-red day for oil and a backlash for luxury.
Our reading: we wait. We're watching the key levels of the CAC 40 (support 7,400, resistance 7,700), keeping an eye on April's luxury publications, and saving cash to play the reversal when it comes. Because it will come - the only question is in what direction and how fast. And let's be honest: a market that has corrected 13% in just a few sessions is rarely a good time to make convinced bets.
✅ To remember
CAC 40 around 7,500 points, after an all-time high of 8,642 pts on February 26
Correction of around -13% since the peak, against the backdrop of the Iran/USA-Israel war
LVMH: -28.5% since January, loses its crown as France's top cap
TotalEnergies: +45% YTD, overtakes Hermès and enters the CAC top 3
Current hierarchy: LVMH (€228.7bn), L'Oréal (€188bn), TotalEnergies (€176bn), Hermès (€169.6bn)
Citi target on LVMH: €621 (potential +30%)
CAC 40 technical levels: support 7,400, resistance 7,700
And you, are you more team "I'm buying the luxury hollow" or team "I'm sticking with energy until the conflict is resolved"? The debate is open.
🔎 Also to be read
Want to go further? Discover all our Equities analyses on ActuTrading Equities so you don't miss a thing 📈
