the essential
The French financial markets have had a difficult week since the announcement of the dissolution of the National Assembly. The CAC40 has fallen sharply over the past week.
The CAC 40 unscrews. While Emmanuel Macron announced the dissolution of the National Assembly last Sunday, June 9, the country’s financial markets suffered a particularly worrying low. “The uncertainty as to the outcome of the French elections is extreme”, comment analysts from the Natixis bank to our colleagues at Parisian, evoking among other things the early legislative elections which are to take place on June 30 and July 7. The fault of the first estimates which give – once again – the presidential majority losing against the union of the left or against the National Rally.
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The programs of these two political forces are not to please the financial markets, which are worried about a possible increase in budget deficits, while the left wants to repeal the pension reform and the far right plans to lower taxes if she comes to power.
The dropout of the Paris Stock Exchange
When anxiety grips the financial markets, the consequences are multiple. First on the Paris Stock Exchange: since last Monday June 10, the CAC 40 fell by almost 6%. In terms of this weekly result, this is the worst week since March 2022 on the French financial markets. The Russian army had just crossed the Ukrainian border. This drop is so significant that it simply canceled out the gains that had been made since the start of the year: the CAC 40 is down 0.33% since the start of the year.
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In this context, investors are choosing not to take any risk: the shares of several large companies are in decline over the week. This is the case of Société Générale (whose share price fell by 15.9%) in one week, BNP Paribas (down 12.9%) and Crédit Agricole (loss of 12.4%). %). Worrying in the banking sector while on a European scale, the major players in the market display “absolutely stratospheric profitability”. For its part, after the dissolution of the National Assembly, the rating agency Moody’s affirmed that at the end of these elections, the political party which would win these elections “would probably not have an absolute majority”. The structure fears “an increased risk of political instability” in the country.
