CAC 40 INDEX
Minimum spread- 0.2
Typical spread- 1.8
Minimum nominal trade size- 1000
Overnight interest (annual) sell- -0.60%
Overnight interest (annual) buy- -0.1.70%
Trading hours (GMT) – 24*5
CAC 40 Trading
The CAC 40, or CAC Index, is one of the world’s major stock indices and lists the 40 largest companies by market capitalization on the Euronext Paris, France’s largest stock exchange. France represents around a fifth of the total economy of Europe, so it is important for traders to follow the CAC 40 index to ascertain where the European economy is heading.
The CAC 40 index composition is reviewed quarterly by an independent steering committee. At each meeting, 40 companies are chosen according to the value of their regulated turnover from the prior 12 months and their free-float adjusted market capitalization.
Understanding the CAC 40 INDEX
The CAC 40 is a capitalization-weighted index. The number of shares issued (used to calculate the market cap and hence the index weight) of a company is reviewed quarterly, on the third Friday of March, June, September and December. Since December 2003, the index weightings of companies in the index have been capped at 15% at each quarterly index review, but these range freely with share price subsequently. A capping factor is used to limit the weights to 15% (if necessary), and is reviewed annually by the Index Steering Committee on the third Friday of September.
Factors to keep in mind while trading CAC 40 INDEX
- Currency Valuations
The CAC 40 is particularly sensitive to Euro fluctuations as it is the index with the most multinational corporations in Europe, as well as having a large amount of foreign investment. A strong Euro makes it cheaper for French companies to buy imports from outside the Eurozone, while a weak Euro means French exports will be more competitive in those areas.
- Unforeseen National and International Crises
The COVID-19 pandemic is one of the biggest global challenges in the last century. It was inevitable that the necessary lockdown restrictions would result in recession for 2020. In France alone, the OFCE believes the initial nationwide lockdown led to a decline of 32% in GDP. In February 2020, the Euronext CAC 40 was priced at highs of 6,111. By the time President Macron was forced to announce a nationwide lockdown a month later, around 39% of the value in France’s top 40 corporations had been wiped out.
- Political Events
How the French economy should be handled is one of the biggest talking points in the lead-up to a French presidential election. There is no doubt that investors in leading French multinationals within the CAC 40 look to the political agendas of respective candidates to decide where next to invest. The outcome of a political election can often be a turning point for the outlook on stock indices like the CAC 40.
Why trade in CAC 40 INDEX with CAPITAL STREET
- BROAD RANGE OF MARKETS- Access to the popular Forex markets, including major, minor and exotic pairs
- CSFX offers you our state-of-the-art platforms and range of trading tools
- Trade using Margin- Get greater exposure to the marketplace with a small deposit and spread your capital using margin.
- Automate your trade facilities and direct access to the market
- Safety of funds