BusinessPostCorner.com
No Result
View All Result
Sunday, June 1, 2025
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources
BusinessPostCorner.com
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources
No Result
View All Result
BusinessPostCorner.com
No Result
View All Result

French stocks head for worst week since 2022 over fears of populist election win

June 14, 2024
in Finance
Reading Time: 4 mins read
A A
0
French stocks head for worst week since 2022 over fears of populist election win
ShareShareShareShareShare

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

French stocks tumbled on Friday as the prospect of a far-right government with the left as the main opposition rattled European financial markets, deepening a sell-off that has wiped almost €100bn off the value of Paris’s main index.

The Cac 40 is on course for its worst week since March 2022. It sank 2.9 per cent by mid-afternoon, led by a renewed sell-off in bank shares.

The index has plunged more than 6 per cent in the five trading sessions since Emmanuel Macron’s shock decision on Sunday to call snap parliamentary elections, in which the president’s own centrist alliance is at risk of a wipeout.

According to recent polling, run-off races in the second round would predominantly be fought between candidates fielded by a leftwing bloc and the far right, with Marine Le Pen’s Rassemblement National expected to make significant gains.

Investors have been fretting over the prospect of a new radical government with big spending plans. Finance minister Bruno Le Maire this week warned that a far-right victory could lead to a “debt crisis” akin to the UK’s gilt market turmoil under former prime minister Liz Truss.

RN’s policy of cutting valued added tax on energy, fuel and food alone would cost €24bn a year, Macron’s campaign said, citing economy ministry figures.

“They will be less friendly towards [the EU] and the things they are talking about from a policy perspective don’t suggest they will come in with a load of fiscal responsibility,” said James Athey, a fund manager at Marlborough Group. “Even a result which isn’t an outright RN win isn’t likely to be stable at all. And markets hate uncertainty, instability and volatility.”

Four leftwing parties on Thursday struck a unity pact for the election, which takes place on June 30 and July 7. On Friday they unveiled a joint programme that includes unfunded spending pledges worth tens of billions of euros.

The left’s uncosted programme would scrap Macron’s planned increased in the pension age to 64 and freeze the prices of food and energy.

The left would hike incomes taxes for the well paid and reintroduce the wealth tax.

“We will finance this programme by dipping into the pockets who can most afford it,” said Olivier Faure, socialist party leader.

The left’s programme also “rejects” EU budgetary rules, which required a deficit of less than 3 per cent of GDP.

New projections by French media based on European parliament election results suggest only about 40 of Macron’s MPs could qualify for the second round and only a handful from the centre right. Some pollsters question the methods used.

Ever more traditional polling projections based on voting intentions suggest the vast majority of MPs in the new assembly will be in favour of huge spending commitments.

Concerns about French markets “range from a stalling of the reform process, possible rating downgrades, to increasing concerns over talk of a break-up in the euro area”, said Mohit Kumar, chief economist for Europe at Jefferies.

Banks — which would be exposed to slowing economic growth and hold substantial government debt — have been among the worst-performing stocks. Crédit Agricole, BNP Paribas and Société Générale have dropped 12.9 per cent, 13 per cent and 15.7 per cent, respectively, this week.

Recommended

Rassemblement National’s Marine Le Pen and Jordan Bardella

Macron’s move has reverberated beyond the French equity market. The euro has fallen against the dollar, while the region-wide Stoxx 600 index is on track for its worst week since October last year, with German, Italian and Spanish stock indices all having lost ground. In marked contrast, Wall Street’s S&P 500 index has added 1.6 per cent this week.

“When the Americans wake up, they’re selling Europe and especially France, which is the weakest link right now,” said John Plassard, senior asset specialist at Mirabaud Group in Switzerland.

Barclays, which for months had been recommending clients have a higher than benchmark weighting in European equities relative to the US, scaled back its position on Wednesday, advising “caution on the region for now given the political situation in France”.

French government bonds have also been hit. The gap between benchmark French and German yields — a market barometer for the risk of holding France’s debt — rose to 0.81 percentage points on Friday, the highest level since 2017.

Video: Why the far right is surging in Europe | FT Film

This article has been amended to correct the value lost by the French market

Credit: Source link

ShareTweetSendPinShare
Previous Post

Gen X cancer rate set to surpass those of Baby Boomers

Next Post

On the move: HCVT COO announces retirement, successor

Next Post
On the move: HCVT COO announces retirement, successor

On the move: HCVT COO announces retirement, successor

How Wall Street offloaded bn of debt tied to Elon Musk’s Twitter deal

How Wall Street offloaded $13bn of debt tied to Elon Musk’s Twitter deal

May 29, 2025
Tesla tested its robotaxi with Austin employees on a closed-street last week, but city officials and first responders say they’re still waiting for key info ahead of June launch

Tesla tested its robotaxi with Austin employees on a closed-street last week, but city officials and first responders say they’re still waiting for key info ahead of June launch

May 26, 2025
IRS leveraging AI for audits amid layoffs

IRS leveraging AI for audits amid layoffs

May 27, 2025
Post Office payouts ‘not by kangaroo court’, says oversight body

Post Office payouts ‘not by kangaroo court’, says oversight body

May 27, 2025
IMF gives Rachel Reeves political cover to ‘refine’ UK fiscal rules

IMF gives Rachel Reeves political cover to ‘refine’ UK fiscal rules

May 27, 2025
Creating in-roads with millennial and Gen Z employees

Creating in-roads with millennial and Gen Z employees

May 30, 2025
BusinessPostCorner.com

BusinessPostCorner.com is an online news portal that aims to share the latest news about following topics: Accounting, Tax, Business, Finance, Crypto, Management, Human resources and Marketing. Feel free to get in touch with us!

Recent News

Treasury secretary Scott Bessent insists US will ‘never default’ on its debt

Treasury secretary Scott Bessent insists US will ‘never default’ on its debt

June 1, 2025
Spike in steel tariffs could imperil Trump promise of lower grocery prices

Spike in steel tariffs could imperil Trump promise of lower grocery prices

June 1, 2025

Our Newsletter!

Loading
  • Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA

© 2023 businesspostcorner.com - All Rights Reserved!

No Result
View All Result
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources

© 2023 businesspostcorner.com - All Rights Reserved!