The Paris CAC 40 index fell on Thursday as threats of harsh economic action against Iran from Donald Trump sent crude oil prices higher.
The benchmark index dropped 0.2 per cent to 8,484.74 points by midday on August 20, putting the Paris stock exchange on course for its eighth consecutive day in the red.
The CAC 40 tracks forty of the largest and most actively traded stocks listed on Euronext Paris. French shares remained weighed down by the lack of diplomatic progress in the Middle East, where geopolitical tension continued to unsettle global financial markets.
Threats over Iranian support
Donald Trump warned on Wednesday that any country assisting Iran in its war effort would face terrible economic penalties, according to a report by Agence France-Presse.
Writing on his Truth Social platform, Trump stated that any nation allowing its financial institutions, companies, airports or government bodies to offer any form of lifeline to Tehran would face severe economic consequences.
He claimed that the measures represented the most crushing economic operation ever undertaken, although he did not name individual countries or detail the specific sanctions under consideration.
The comments followed statements made the previous week by US Treasury Secretary Scott Bessent, who threatened Iran with economic isolation of a scale that the world had never seen before.
Surging oil prices and European exposure
Crude oil prices advanced sharply following the warnings from Washington. October contracts for Brent North Sea crude gained 2.38 per cent to 93.77 dollars a barrel, while October West Texas Intermediate in New York rose 2.48 per cent to 87.96 dollars a barrel.
Brent crude serves as the international pricing benchmark for global oil markets, while West Texas Intermediate is the standard benchmark for United States crude contracts.
The jump in energy prices dampened sentiment across European exchanges, even after Wall Street found support from government bond purchases. On Wednesday, the US Treasury announced that it intends to at least double the size of its bond buyback operations, providing relief to American equity and debt markets.
Treasury buybacks involve the United States government purchasing older bonds back from investors to bolster liquidity and maintain orderly trading in the sovereign debt market.
However, analysts at Deutsche Bank said that European markets were not benefiting as much from the US Treasury announcement and were more exposed to the recent rise in energy prices.
Broker upgrades for Michelin and Sartorius
Despite the broader market decline in Paris, several individual stocks advanced after receiving positive broker recommendations.
Tyre manufacturer Michelin climbed 1.7 per cent after JPMorgan upgraded its recommendation on the stock from neutral to overweight.
Biopharmaceutical supplier Sartorius Stedim Biotech surged 5.2 per cent following an upgrade from UBS, which lifted its rating on the shares from neutral to buy.
In foreign exchange trading, the euro gained 0.2 per cent against the American currency to trade at 1.17 dollars at midday.
