CAC 40 Definition – History, Stock Index Price

CAC 40 Definition: The CAC 40 is a stock market index that includes the forty French companies listed on the stock exchange. The acronym CAC stands for Cotation Assistée Continuous (Continuous Assisted Quotation), meaning that its value is constantly changing. The number 40 refers to the number of French companies that make up the index.

What is CAC 40 – Definition

The CAC 40 stock market index is calculated daily from the evolution of the prices of the 40 shares listed on Euronext Paris.

The CAC 40 is a stock market index which is of great importance in the French economy. Indeed, when the CAC 40 increases, it means that the economic climate is improving. The daily CAC 40 trading period begins at 9:00 a.m. and ends at 17:30 p.m. on business days. It is also updated every 15 seconds in real time.

The CAC 40 stock index was created on December 31, 1987 with an index value of 1000 points.

Synonym CAC 40

Here are the terms that also mean CAC 40:

• France 40;
• CAC40;
• France40;
• Continuous assisted quotation;
• K40;
• CAC 40 index.

Etymology CAC 40

The CAC is an acronym for Continuous Assisted Rating. The number 40 symbolizes the most significant companies in France.

Terms or Vocabularies Related to the CAC 40 in

• CAC 40 component – ​​Definition: A CAC 40 component is a publicly traded company that appears in the list of the 40 most important groups in France.
• CAC 40 Index Quotation – Definition: The CAC 40 Index quotation represents the performance of this stock market index over a specific period. Changes in quotation rates are similar to changes in the index's value. For example, if the CAC 40 rises from 5800 to 5801, this means that the CAC 40 index has increased by 1 point.
• Increase in the CAC 40 Index – Definition: As its name suggests, an increase in the CAC 40 Index is an increase in its price. Let's return to the example we just used. The CAC 40 price rose from 5800 to 5801, meaning there was an increase of 1 point.
• CAC 40 Index Fall – Definition: A fall in the CAC 40 index is a decrease in the index's value. For example, when the values ​​drop from 5600 to 5550, the index falls.
• Market Capitalization of a CAC 40 Company – Definition: A company's market capitalization is its true market value. It is calculated by multiplying the value of all shares by the price of one share. This company market capitalization determines the amount of capital needed to purchase all the shares of a company.
• Gross Return or CAC40 GR – Definition: Gross return GR is the gross return including gross dividends before reinvestment and before taxation.
• Net Return or CAC40 NR – Definition: The Net Return is a stock market index based on the CAC 40 and net dividends reinvested.

Other Definitions

CAC is an abbreviation that we can meet almost everywhere. For example, it is the acronym to designate a Statutory Auditor who is responsible for the financial and accounting information that companies produce.

CAC is also the name of an accounting firm which means “Conseils et Applications Comptables”.

The acronym CAC also stands for “Centrales des Artisans Coiffeurs”.

What is Euronext – Definition

Euronext is a company that administers many stock exchanges in Europe. We can find it in 6 European countries. As it is a market company, it is an important component in the management of stock exchanges. Therefore, the AMF or the Autorité des Marchés Financiers closely monitors its activities.

Euronext Paris is the regulated market of the Paris Stock Exchange. Euronext Paris ensures the general operation of the Paris Stock Exchange. This entity is however under the supervision of the AMF.

How does the CAC 40 work?

As we mentioned in its definition, the CAC 40 is made up of 40 companies. These are values ​​that are chosen from around a hundred French companies. The trading volumes of securities of these companies are the most significant on the Euronext European stock exchange. Euronext constantly calculates the CAC 40, monitors it and disseminates its listing value.

As the weight of each of the stocks in the index is weighted by the size of the capitalization, the index generally presents the trend of the economy of large companies in France as a whole.

What is a CAC 40 Future – Definition

By simple definition, a CAC40 future is a short-term contract based on the CAC 40 index. The CAC40 future is quoted in points, the unit of which is worth 10 euros. So, for a contract price at 3500 points, the price therefore amounts to 35000 euros.

In the same way as all futures contracts, the CAC40 benefits from a cash settlement when the contract closes. This type of contract can be made until 3^e Friday of the month of the deadline. It is important to know that there are nearly 14 rolling deadlines to carry out the negotiations.

What is a CAC 40 Point?

A CAC40 point is the unit of measurement for evaluating this stock market index. It changes while being based on its original value of 1000 points which was fixed on December 31, 1987. For example, if the CAC40 has a value of 4000 points, this means that 1000 euros deposited in 1987 in a product indexed to the stock market index is worth 4000 euros.

What is Trading on the CAC 40 Index?

Trading on the CAC40 Index is an operation that consists of opening and closing buy and sell positions with the aim of obtaining gains. For example, a trader estimates that the evolution of the CAC40 will go from 4500 to 5000 points. He will then proceed to open a buy order. If he was right, he will then make a profit of 500 points.

What is France 40 Chart – Definition

A CAC40 chart is a table illustrating the evolution of this index. The CAC40 chart is an indicator that shows how the index has evolved over a dozen years. To check the evolution of this index, you must use a trading platform such as MetaTrader 4 or MetaTrader 5. These platforms are offered by the most popular brokers of the moment.

What is a Sector of Activity Represented at the CAC 40?

A sector of activity represented in the CAC40 is a set of industrial or economic activities relating to the CAC40 which share the same characteristics. Among the most important sectors of the CAC40 is the consumer discretionary sector. This sector concerns services that are not a priority such as electronics, hotels, restaurants, etc.

One can also find other sectors of activity in the CAC40 such as consumer staples, the technology sector, Real Estate (real estate) and many others.

What is CAC 40 Correlation – Definition

The CAC40 correlation is an indicator of CAC40 value indicating how the prices of the index are moving compared to others. Correlation determines the behavior of certain markets by moving in one direction or in different directions at the same time.

What is the Correlation between the CAC 40 and Other Stock Market Indices in

The correlation between the CAC40 and other stock market indices such as Euronext is an indicator describing the level of relationship between two variables. This correlation between the CAC40 and stock market indices is expressed as a percentage.

Thus, when it indicates 100% or positive, it demonstrates a maximum direct relationship between the indices. This means that when an index changes by 1%, the second index will also vary by 1% in the same direction.

When there is no correlation or when it indicates 0%, this demonstrates the presence of the relationship. Therefore, any variation in index quotes will not affect another's quotes.

Finally, when the correlation indicates -100% or is negative, it means that there is a peaking inverse relationship between the indices. Consequently, for a variation of 1% of an index, the second changes by -1%, therefore in the opposite direction.

What is a CAC 40 Company – Definition

A CAC40 company is a company that appears in the list of the most significant stock market index of the Paris Stock Exchange. The companies that are part of the CAC40 are 40 in number. These are the largest French groups with most often international activities and billions in turnover.

What is a CAC40 Shareholder – Definition

A CAC40 shareholder is a holder of one or more shares of companies listed in the CAC40. CAC40 shareholders can be residents in France, but also residents abroad.

The major shareholders of the CAC40 are made up of investment funds from major financial asset management groups such as Blackrock. We can also find among these major shareholders the Arnault family, the French State or the Norwegian State.

Before the Creation of the CAC 40 Index

The CAC 40 index is actually a relatively recent stock market index used to measure the financial health of the French economy. Before 1988, there was indeed an INSEE index of the Paris Stock Exchange to measure these performances and which was quintupled in the 1920s and then again in the 1950s, despite the geopolitical uncertainties on the occasion of these two periods of economic growth.

During the 1960s and 70s, this trend came to an end with the gradual diversion of small investors from a permanently downward trend in the Paris Stock Exchange and a 7% drop in French holding shares.

But in the early 1980s and despite a more gloomy economic context, there was an upward trend in this index with a recovery in stock market prices. Indeed, financial globalization then took its first steps in the world of finance and the reforms carried out by François Mitterrand in the banking system with the banking law of 1984 contributed to blowing up the Paris stock market as well as that of London in 1986 and led to the creation of the CAC 40 stock market index in December 1987.

Birth of the CAC 40 stock market index

It was therefore following the crash of October 1987 that the CAC 40 was born. This index thus changed the monopoly of financial and stock market transactions.

It should be remembered that these transactions were once directly managed by ministerial officers and stockbrokers. Following the edition of law 88-70 of January 1988, this management was entrusted to brokerage firms. Moreover, the meaning of the name CAC at that time was not the same as now and corresponded to Compagnie des Agents de Change.

The CAC 40 index was defined with a base value of 1 points on December 000, 31. It will reach its lowest point on January 1987, 29 at 1988 points. But it was not until June 893.82, 15 that the CAC 1988 truly saw the light of day. He will end this first year with a course at 40 points.

The Speculative Bubble and the 2000 Record

Thanks to the speculative bubble in the values ​​of the telecommunications, media and technology sector, the CAC 40 index reached a historic high on September 4, 2000 at 6 points before falling back to 944.77 points. on March 2, 401.15, its lowest level since 12 and due to production overcapacity in Europe and the United States.

Since the beginning of December 2003 and like the main world indices, the CAC 40 takes into account both the stock market capitalization of the companies which enter into its composition but also the free float and therefore the securities actually available on the stock market.

Several Bullish and Bearish Trends from 2007 to 2011

• The CAC 40 index will then experience a rise to 6 points on May 000, 2 after a 2007% increase in points in just four years and even reached 150 points on June 6 of the same year. In July 168.15, the composition of the CAC 1 index represented more than 2007% of the total capitalization of the Paris Stock Exchange, i.e. 40 billion euros, before falling back to less than 70 billion euros at the start of the year. 1.
• In January 2008, the price of the index fell again and fell below 4 points in July and then 200 in October. During this stock market crisis, the index will lose more than 3% since January and even lost more than 200% during the week of October 43.5 to 22, 6. It was during the session of October 10, 2008 that the index recorded its largest daily increase since its creation with an increase of 13% to 2008 points and its largest fall took place shortly before October 11.8, 3 with a drop of 531.50% to 6 points.
• 2008 was therefore the worst year in the history of the CAC 40 with a drop of 42.68%, the biggest fall since its creation. But in 2009, it will regain some stability after hitting a low of 2 points in March. It will then progress upwards until the crash of 465.46.
• As of August 3, 2011, the market capitalization of the CAC 40 was 873 billion euros.

Resumption on the rise of the CAC 40 price

• After the July and August 2011 crash, the price of the CAC 40 index resumed an upward trend and rose between 4 and 000 points. Its market capitalization thus rose to 5 billion euros in 700 and even reached 1 billion euros in April 500.
• From 2017, the CAC 40 includes companies from the technology sector with the entry of the Atos group in March, then the STMicroelectronics group in September of the same year and finally Dassault Systèmes in September 2018. In June 2019 and still in this same sector of activity, it is the company Thalès which is entering the composition of the index. The technology sector is thus gaining a place in an index that has long been dominated by financial and industrial stocks.
• In 2019, a record distribution of 60.2 billion euros, including 49.2 billion in dividends and 10.7 billion in share buybacks, was recorded by the CAC 40. This will be followed by the largest drop in the history of this index on March 12, 2020 with a fall of 12.28% due to the health crisis.

The Crash of 2020 and the Impact of Covid on the CAC 40

• While the Parisian index has been evolving since the end of 2019 at levels close to 6 points, notably thanks to certain of its values ​​such as Kering shares (buy Kering shares), Hermès, ArcelorMittal (buy Arcelor Mittal shares), l'Oréal and LVMH , a first strong downward trend was recorded between January 000 and 27 with a loss of 31% after the announcement of the arrival of the first cases of Covis in France. But on Wednesday February 5, the CAC regained points and reached the level of 19 points.
• But the significant increase in contaminations in Europe, first and foremost Italy, led to a loss of 24% of the index from February 3.94 and this month will remain negative, especially during the week of March 9 to 13 with one of the worst drop recorded on Monday and an 8.39% loss in a single session, especially after a 30% drop in the value of oil.
• On Thursday March 12, the biggest loss of points in the CAC 40 index will occur with a drop of 12.28% and a price that will end the session at 4 points, the worst session since the index was created. It is in particular because of many rumors of confinement which were confirmed in the evening by Emmanuel Macron that this fall took place. The loss of points will also continue during the following days with a drop to 044.26 points on Thursday March 3th. In just one month, the Paris index suffered a 754.84% drop.
• However, we will observe a first upward correction of 20% at the end of March, then a second of the same magnitude in November after the announcements concerning the approval of vaccines.
• In April of this year 2025, the flagship index of the Paris Stock Exchange thus managed to return to its pre-crisis peak, in particular thanks to hopes of economic recovery almost everywhere in the world and the lifting of containment measures. The index thus reached 6 points and is today close to its 131.34 record with one of the best performances of all the world stock markets since the beginning of the year.

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Conclusion on the CAC40 Definition

Now you know everything you need to know about the CAC 40. Knowing this stock market index is very important for anyone who wants to trade. Investing in the CAC 40 can bring a lot to the trader, because this index is weighted. That is to say that it is possible to adjust the weight of each index value which is there according to the importance of the capitalization.

The Paris Stock Exchange index has numerousvantages for its investors. First of all, it is an important analytical tool in trading and investing. Also, it can be acquired in the form of CFD or futures contract. The CAC 40 experiences periods of rapid growth as was the case between 2003 and 2006 during which it increased by 124%.

The CAC 40 is also made up of French companies. For a trader, this is an important detail because finding information is easier. In short, enough to help a confirmed trader to increase these gains.

Who is part of the CAC 40?

These are the large companies with a mature profile that make up the CAC 40. We can see many groups from different sectors such as L'Oréal, Sanofi, Total, Hermès, as well as other large companies.

What is CAC?

The CAC is the acronym for “Continuous Assisted Rating”. This means that the value varies constantly at the opening until the closing of the market. This acronym also refers to the Compagnie des Agents de Change, a former French financial institution that monopolized stock market transactions.

What is the CAC Level?

The level of the CAC today exceeds 6500 points. This is the second time this has happened since the year 2000. Note that when it was created in 1988, the CAC was worth 1000 points.

⚙️ How does the CAC 40 work?

In the definition, we have seen that the CAC 40 is made up of 40 of the most valuable companies in France. These companies are chosen according to their securities trading volumes, which are among the largest in Europe. The value of the CAC 40 is calculated continuously and it is the Euronext entity that takes care of its management. The CAC 40 indices change according to capitalization and the index indicates the overall trend of large companies in France. Note that the CAC 40 index is a trading instrument that can be acquired in the form of CFDs.