At the opening of the markets, the flagship Paris index, the CAC 40, has made significant progress. Driven by the banking sector, it gained 2.59%. Société Générale gained 7.21% to 23.50 euros, Crédit Agricole 5.26% to 13.41 euros and BNP Paribas 5.07% to 62.55 euros. Other companies that have suffered in recent weeks, such as Vinci, Eiffage, TF1 and Engie, were also up sharply. THE Bel 20 for its part increased by 0.84%.
Markets reassured
With more than a third of the votes at the national level, the RN and its allies are less than the 36% to 37% announced by the polls of the last days of the campaign and “Ultimately, the Macronists have not completely collapsed”notes Alexandre Baradez, chief analyst at IG France. Furthermore, “As other parties now appear ready to form alliances in the second round, the chances of the extreme right obtaining a majority in the National Assembly should be further reduced”comment Deutsch Bank analysts.
“RN on the brink of power”, “Macronie is down”, “The end of an era”…: discover the front pages of the French media the day after the legislative elections
For the markets, this is the victory of “at least worst case scenario” which took place on Sunday, comments John Plassard, investment specialist for Mirabaud. “What the market feared most was an absolute majority, on one side or the other. For the moment, for the National Rally, this scenario has not yet been ruled out, but we see that the negotiations have started on the question of withdrawals”he adds.
“This desire to withdraw may not give the RN an absolute majority and may allow some programs to be smoothed over, starting with that of Gabriel Attal on the reform of unemployment insurance.”the analyst believes. The Prime Minister announced on Sunday evening that he was putting on hold the controversial reform of unemployment insurance, denounced by both the extreme right and the left-wing alliance. “Investors seem relieved that the far-right party will not be able to secure an absolute majority in the National Assembly, despite historically high results”says the Belga press agency.
An election and a dissolution that are not going down well with the financial markets. “I don’t think it is possible to talk about panic yet”
The euro is progressing
The Euro was strengthened after the results of the first round of the legislative elections in France. “Markets were relieved that the victory of Ms Le Pen’s far-right party was not as decisive (as expected), and some of the risk premium attached to eurozone assets in recent weeks was erased.”commented Charu Chanana, currency strategist at Saxo Capital Markets.
The European currency climbed to 173.43 yen against 172.36 yen at the end of last week, and rose to 1.0773 dollars against 1.0713 dollars on Friday. THE oil was on the rise: around 06:20 GMT, a barrel of American WTI gained 0.61% to 82.04 dollars and a barrel of Brent from the North Sea gained 0.62% to 85.53 dollars.
