Paris’ benchmark CAC 40 has been on a strong run—up 13% in 2025 and notching a new intraday record of 8,642.23 points in February 2026. But the headline performance is masking a growing disconnect: the index’s biggest companies are increasingly driven by business outside France, leaving the stock market less tied to the country’s domestic economy.
The CAC 40 posted its best month in more than a year in February 2026, rising 5.6%—its strongest monthly gain since a 7.7% jump in January 2025. The record came during the session on the Thursday before the month-end close.
That surge followed a downbeat start to the year. In January 2026, the index slipped 0.28% to 8,126.53 points, weighed down by French budget uncertainty, geopolitics, and volatility in currency markets.
A French index that “photographs the health of the global economy”
Those flattering numbers “mask a reality,” according to Gabriel Gaspard, a retired business executive and specialist in financial economics, writing in an opinion piece published by La Tribune: the CAC 40 no longer reflects the French economy. Instead, he argues, it captures the health of the global economy.
More than 75% of CAC 40 revenue now comes from outside France
The index’s largest companies now generate more than 75% of their revenue abroad. The Banque de France has also noted that about 50% of CAC 40 capital is held by non-residents.
Company leaders, the argument goes, are chasing liquidity, higher valuations, and access to international investors—through New York listings, concentrating operations across the Atlantic, and globalizing supply chains. In that context, buying shares in Total, LVMH, or Airbus is a bet on global growth, not on France’s GDP. Meanwhile, France’s share of global GDP continues to shrink.
One direct consequence, Gaspard says, is that financial markets are no longer serving as a transmission belt to France’s mid-sized companies. While the state subsidizes large groups, small and mid-sized firms—PMEs and ETIs, which account for much of employment and locally rooted growth—remain on the sidelines of major capital flows.
Capital taxation: a claimed €4.5 billion gap a year
Gaspard points to several fiscal levers he says are being left unused. He highlights the 2018 shift from France’s former wealth tax (ISF) to the real-estate wealth tax (IFI): receipts moved from €1.29 billion (about $1.39 billion) in 2018 to €1.83 billion (about $1.98 billion) in 2022. By his calculations, if the ISF had been maintained, it would have brought in about €6.3 billion (about $6.8 billion) in 2022—implying a shortfall of €4.5 billion (about $4.9 billion).
On France’s flat tax on capital income, the OFCE (a French economic research institute) estimated from the outset that the 30% “prélèvement forfaitaire unique,” introduced in 2017, would cut tax revenue by about €4 billion (about $4.3 billion) a year, with the reduction largely concentrated among the wealthiest households. As of 2026, that rate has only been raised to 31.4%.
Gaspard also argues for taxing carried interest as ordinary income when the nature of the compensation justifies it, and for creating an exceptional bracket on very high incomes rather than relying on one-off adjustments.
Sector rotation may broaden gains, but the underlying split remains
Frédérique Nakache, a portfolio manager specializing in French equities at Ofi Invest AM, said in March 2026 that after a 2025 driven by bank and defense stocks, other sectors could lift the index this year.
That broader participation could be healthy for the Paris market. But it doesn’t change the core dynamic described by Gaspard: the CAC 40’s stock-market performance and the economic health of metropolitan France are now moving on two separate tracks.
