The Paris Stock Exchange fell by 6.42% in June, its worst performance since June 2022, undermined by the dissolution of the National Assembly and the uncertainty surrounding the next French legislature.
On Friday, two days before the first round of legislative elections in France, the leading CAC 40 index closed with a loss of 0.68%, ending at 7,479.40 points, its lowest level since January 25.
The gap between the interest rate on France’s ten-year bond and that of Germany, the benchmark in Europe, is also the largest since 2012.
As often seen during this month of June, the French stock market fell sharply on Friday compared to other European markets: Frankfurt ended up 0.14% and London down 0.19%, supported by data in line with economists’ expectations on inflation, particularly in the United States. Over the month, these two stock markets fell by less than 1.5%.
And the quarterly results are hardly better for the Paris Stock Exchange. Here again, we have to go back two years, to the second quarter of 2022, to find a worse performance (-8.85%) than that of the last three months.
Over the first six months of the year, the performance of the Paris market is ultimately negative (-0.85%), while the CAC 40 nevertheless broke its records during the period, climbing to 8,259.19 points during the session on May 10.
On Friday, as since the announcement of the dissolution of the Assembly on June 9, investors especially wanted to limit their exposure to investments that they perceive as the riskiest, whether shares or French debt, explained Marine Mazet, bond analyst at Nomura.
The polls provided a clear hierarchy for the vote. According to the daily Ifop-Fiducial barometer for LCI, Le Figaro and Sud Radio, published Friday, the National Rally (far right) is largely favored with 36.5% of voting intentions, ahead of the left-wing alliance Nouveau Front populaire at 29 % and the camp of President Emmanuel Macron, still behind at 20.5%.
However, “the first round should not clear up all the horizons and we will have to take the seat projections with a pinch of salt, because there will be many duels or triangulars” and the alliances and transfers of votes are still uncertain, stressed Ms. Mazet.
Already lacking confidence in France’s ability to bring its public deficit below the threshold of 3% of its gross domestic product (GDP) by 2027, the stock market fears the implementation of expensive economic programs.
This was also felt on the bond market: the interest rate on the 10-year French bond, the benchmark maturity, reached its highest level since November and was hovering around 3 at the close of the stock market on Friday. .29%, compared to 2.48% for its German equivalent.
– Banks in distress –
On the value side, the worst performance over the month on the CAC 40 went to Société Générale, whose shares fell by almost 20%. The entire banking sector suffered, with a fall of more than 14% for Crédit Agricole and more than 12% for BNP Paribas.
Sensitive values due to their links with the State have also suffered from investor distrust, such as Vinci (-14.04%) which manages motorway concessions or Engie (-1416%).
Airbus (-17.73%), after lowering its 2024 financial targets, and Eurofins Scientific (-15.91%), criticized by a short-selling specialist fund on Monday, also stumbled over the month as a whole.
Barely three companies ended June higher than they had started it: Kering (+6.72%), which rebounded but whose shares are a third lower than a year ago, and, in very slight progress, Sanofi (+0.20%) and Capgemini (+0.05%).
Euronext CAC40
