(BFM Bourse) – The CAC 40 is falling sharply at mid-session this Tuesday after falling sharply the day before, weighed down by political uncertainty in France.
After being on the ropes the day before, the CAC 40 is still groggy. The Parisian index fell by another 1.2% at mid-session on Tuesday, to 7,798.09 points, while it had already lost 1.35% on Monday. The Parisian market opened in the green before stalling around 11 a.m.
All European markets remain disrupted by political uncertainty in France, caused by Emmanuel Macron’s decision to dissolve the National Assembly, following the clear victory in France of the National Rally in the European elections.
President Macron “surprised everyone” by dissolving the National Assembly “and calling new legislative elections at the end of the month after last Sunday’s results. This adds significant political uncertainty to the region, as investors see now clearly the possibility of seeing Marine Le Pen, far-right leader, as the next Prime Minister in France”, notes Pierre Veyret, technical analyst at Activtrades.
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Banks still under pressure
“There is no particular triggering factor this Tuesday. We remain on the same themes from the day before, namely that the market is waiting to see the next polls, the next alliances. But as long as we have not visibility on the ballot, that is to say probably before its outcome, there is no short-term incentive for the market to take up risk”, explains Alexandre Baradez, head of market analysis at IG France.
Tensions on French debt continue to rise, with the yield on the 10-year French bond increasing by another six basis points, or 0.06 percentage points, to 3.293%. Above all, the yield gap with the German security of the same maturity now stands at 63 basis points, a level not seen since October 2023.
Alexandre Baradez judges that this gap reflects “psychological stress” in the market in the short term. The market expert judges that there is currently “no reason to buy European stocks, French ones in particular, and that this complicated climate could spill over to other assets including American stocks.”
On the values side, the same securities that suffered on Monday continued their decline, including banks. Crédit Agricole SA drops 3.8%, Société Générale 3% and BNP Paribas 2.5%.
JCDecaux for its part lost 2.7% while Deutsche Bank went from “buy” to “hold” on the stock.
On other markets, the euro is still suffering against the dollar, losing 0.35% to 1.0729 dollars. Oil is falling a little. The August North Sea Brent contract fell 0.2% to $81.49 per barrel, while the July WTI contract listed in New York also fell 0.2% to $77.56 per barrel. .
Julien Marion – ©2024 BFM Bourse
