European markets effected by election mess
Date
6/12/2024 8:46:54 AM
(MENAFN) The aftermath of the European Union Parliament elections and French President Emmanuel Macron's unexpected announcement of a snap general election has sent shockwaves through European markets, triggering a decline in stocks as traders grapple with Political uncertainty. Initial results from the European Union parliamentary elections, which concluded after four days of voting, have pointed to a surge in support for far-right and conservative parties across the continent. Macron's centrist Renaissance alliance suffered a significant setback, with Marine Le Pen's far-right National Rally group making significant gains.
On Monday, France's CAC 40 stock index plummeted by 2 percent, reaching its lowest level since February, following Macron's announcement of the dissolution of the National Assembly and the snap election call. The country's banking and utility sectors bore the brunt of the sell-off, with shares of Societe Generale and BNP Paribas experiencing steep declines of 7.8 percent and 4.7 percent, respectively. The broader pan-European Stoxx 600 index also experienced a downturn, dropping by 0.4 percent, with construction stocks leading the losses, falling by 1.5 percent.
The political turmoil in France reverberated across currency markets as well, with the euro sliding by 0.6 percent to a one-month low of USD1.0733 and by 0.4 percent against the British pound. The unexpected electoral outcomes in France, marked by the resounding success of the right-wing National Rally and the relatively weak performance of Macron's party, have injected further uncertainty into financial markets.
Susannah Streeter, head of money and markets at stockbroker Hargreaves Lansdown, emphasized the impact of Macron's snap election decision on market sentiment, describing it as contributing to the "uncertain tides swirling around financial markets." The unexpected political developments in France have heightened concerns among investors, underscoring the need for vigilance amid shifting political dynamics in Europe.
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