CAC 40 Index

The CAC 40 is a French stock market index that follows the 40 most significant values among the 100 highest market caps on the Paris Bourse (now Euronext Paris). It is one of the main national indices of the pan-European stock exchange group Euronext. The CAC takes its name from the Paris Bourse's early automation system, the Cotation Assistee en Continu.

The CAC 40 is based on companies selected from a free float market capitalization and share turnover from the previous year. From the top 100, 40 are chosen, which makes the CAC 40 a relevant benchmark for portolio management. The index is reviewed quarterly by an independent steering committee. No changes were made in 2008.

The CAC 40 is made up almost exclusively of French companies, but 45 percent of its listed shares are owned by foreign investors, more than any other main European index. A large percentage is due to the fact that there are more international or multinational companies on the CAC 40 index than other European markets.

The largest companies represented on the CAC 40 are: AXA (insurance), BNP Paribas (banks), ArcelorMittal (steel), France Telecom (fixed line communications), GDF Suez (gas distribution), Group Danone (food products), Sanofi-Aventis (pharmaceuticals), Societe Generale (banks), Total (integrated oil and gas), Vivendi (broadcasting and entertainment), Carrefour (food retailers) and L'Oreal (personal products).

The Paris Bourse operated as an open outcry exchange until the late 1980s, with agents operating on the exchange floor of the Palais Brongniart. In 1986 the Paris Bourse began to implement an electronic trading system and by 1989 it was completely automated. In 2000 the Paris Bourse merged with the Amsterdam, Lisbon and Brussels exchanges to form the Euronext, the second-largest exchange in Europe behind the London Stock Exchange.

CAC 40 Index Articles - by BetterTrades