European stocks slide on French political uncertainty

Europe’s stock markets slid in opening deals on Monday as investors fretted over French political uncertainty following snap elections in which a hung parliament appeared the likeliest outcome.

In the eurozone, the Paris CAC 40 benchmark stocks index sank 0.4 per cent and Frankfurt’s DAX shed 0.1 per cent, while London’s FTSE 100 index was down 0.3 per cent in value.

Meanwhile, the euro stumbled against the dollar and pound.

But after half an hour of trading, the Paris CAC 40 had erased the losses and had edged into positive territory, as had Frankfurt’s DAX.

France’s left was set to emerge as the biggest group in a new parliament, beating out a resurgent far right in a vote called by President Emmanuel Macron three years ahead of schedule.

Macron’s centrist alliance will have dozens fewer members of parliament but held up better than expected and could end up in second.

Yet no group is expected to have won an absolute majority in the second-biggest economy in the European Union.

“Political uncertainty in France is set to remain elevated in the coming weeks until there is greater clarity over what form the next government will take,” noted MUFG economist Lee Hardman.

“With all three major parties falling well short of an absolute majority in parliament, it remains likely that the next government will struggle to implement their policy agenda.”

AFP

All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH.

Contact: [email protected]