Shares of French luxury goods companies and banks rose after the latest inflation reading showed an increase in inflation.
Inflation is rising
INSEE data confirmed an acceleration of inflation in France.
- In May, the HICP (year over year) reached 2.8%, the highest level since 2024.
Who is rising?
The top gainers among luxury companies were LVMH (MC.FR) +4%, Hermès (RMS.FR) +4%, and Kering (KER.FR) +5%.
MC.FR (D1)
The price broke above resistance at the 78.6% Fibonacci level (where the long-term trendline also runs) and stopped at the 61.8% Fibonacci level, where the EMA200 moving average is also present. Source: xStation5
Gains also extended to French banks, including BNP Paribas (BNP.FR) +5%, Société Générale (GLE.FR) +6%, and Crédit Agricole (ACA.FR) +3%.
BNP.FR (D1)
The bank’s valuation is approaching an all-time high. Based on Fibonacci levels, the next potential target for buyers can be set at around €110–€120. If buyers lose momentum, the first support level would be around €88. Source: xStation5
The market reaction stems from the belief that both sectors may perform relatively well in an environment of elevated inflation.
For banks, higher price pressure can support expectations that interest rates will remain higher for longer, which typically improves net interest margins.
Luxury companies, in turn, have historically shown the ability to pass higher costs on to customers without materially weakening demand - especially among wealthier consumers.
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