Investing.com – The plunge in French stocks deepens sharply this Friday, with the stock down 2.43% at the time of writing, at 7,520 points, an area that has not been visited since January .
Compared to last week’s close, the Paris Stock Exchange index now shows a fall of more than 6%.
The dissolution of the National Assembly announced on Sunday by Macron, which opens the way to a period of uncertainty and political tension in France, remains the main subject worrying investors, although the Fed meeting more hawkish than expected on Wednesday evening also played a role.
Concerning more precisely the fall of this Friday, it seems to have been favored by the fact that the Minister of the Economy Bruno Le Maire warned of a “financial crisis” in France if a coalition led by the left or the far right wins the legislative elections.
Risk of financial crisis in France according to Le Maire, rating agencies could crack down
“We now borrow more expensively than the Portuguese,” he stressed. Marine Le Pen’s National Rally (RN) is calling in particular for a reduction in VAT, notably to 5.5% on energy, food and gasoline. Furthermore, the party’s program for the 2022 presidential election mentioned several nationalizations, as well as a return to retirement at 60.
Ratings agency Standard and Poors, which recently downgraded France’s debt rating, warned this week that policies advocated by the far-right party could have consequences for the rating.
The left-wing parties, who announced Thursday an agreement on a common program with a view to the legislative elections, wish to lower the retirement age and introduce a new wealth tax.
However, Bruno Le Maire stressed that “with the projects of the extreme left and the extreme right, the debt cannot be financed”.
The massacre continues on CAC 40 shares
In this context, investors are panicking regarding certain stocks. At the time of writing this article, 6 CAC 40 stocks showed declines of more than 4%, with Thales (EPA:), Veolia (EPA:) and Société Générale which lost more than 5% over the day.
However, knowing that all the other days of the week, with the exception of Wednesday, turned out to be frankly negative, and that last week also ended with a bearish result, the question arises as to whether the weather would not be to take action to buy at low prices shares which would have been excessively sanctioned.
Indeed, while it was difficult ten days ago to find undervalued CAC 40 shares based on valuation models, a search that we have just carried out on the InvestingPro+ screener allowed us to identify 12 CAC 40 stocks considered undervalued by InvestingPro Fair Value.
Remember that Fair Value results from an intelligent synthesis of several recognized and proven valuation models, and provides InvestingPro subscribers with a precise objective for each market action.
The upside potential of these 12 stocks ranges from +20.7% to +55.9% depending on Fair Value.
However, this criterion alone does not allow you to choose with complete confidence the best CAC 40 shares to buy. The level of security, which can be assessed by another InvestingPro indicator, the Financial Health Score, should also be taken into account.
In this regard, note that two of the stocks on this list have a score considered “very good”, which could make them the best choice for investors who prioritize safety over yield.
If you are a subscriber to InvestingPro+, you can easily find the list of these stocks by reproducing the following search on the screener in your member area:
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We also offer a -10% discount on 1 and 2 year Pro subscriptions, but please be aware that some features used in this article, including the stock search filter in the screener, are reserved for Pro+ subscribers.
The Pro subscription will, however, allow you to consult the Fair Value of all stocks, to use the basic functions of the screener, and above all to access ProPicks strategies managed by AI, to obtain effective turnkey advice with lists of stocks to buy to outperform the market.
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