Euro falls amid French political uncertainty, Asian stocks gain on strong Taiwan
(MENAFN) The euro saw a decline due to concerns about France's finances following the recent election, while Asian Stocks posted modest gains, bolstered by an increase in Taiwan's index. Initially, the euro fell by as much as 0.4 percent but later regained some ground as no single French political party managed to secure a majority after the second round of voting. This situation heightens the risk of political instability in France, a country not accustomed to coalition governments. However, it also potentially curtails the influence of both the left-wing New Popular Front and Marine Le Pen's National Rally, both of which have advocated for increased public spending.
French government bonds lagged behind their German counterparts in performance. Krishna Guha, chief strategist at Evercore ISI, noted in a client memo that the election outcome is generally positive for the market, as the risks associated with the National Rally have diminished, and the far-left New Popular Front coalition is unlikely to secure a majority or implement their coalition agenda. The New Popular Front, an alliance of four left-wing parties—Socialist Party (PS), French Communist Party (PCF), France Insoumise (LFI), and the European Ecology Party (Les Verts)—was hastily formed following the dissolution of the National Assembly by President Emmanuel Macron.
In the Asian markets, stocks experienced slight increases, particularly in the technology sector. Taiwan Semiconductor Manufacturing Co (TSMC) surged by up to 2 percent, reaching a record high after Morgan Stanley raised its price target for the stock. Despite this, the MSCI Asia-Pacific index saw more declines than advances, with about three stocks falling for every two that rose. Additionally, China’s CSI 300 index declined after experiencing a seven-week losing streak.
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