London (AFP) – European stock markets slid and the euro retreated Friday on lingering concerns over France’s looming snap election, called after President Emmanuel Macron’s party lost to the far right in last weekend’s EU vote.
Macron on Sunday stunned France by calling snap legislative elections for June 30, with a second round on July 7, after Marine Le Pen’s far-right National Rally scored more than double the number of votes of his centrist alliance.
Paris’ benchmark CAC 40 stocks index tanked by more than two percent around the half-way stage on Friday. Milan sank 2.8 percent while Frankfurt shed 1.2 percent. Outside the eurozone, London lost 0.5 percent.
The euro fell to $1.0684 from $1.0746 the previous day. XTB trading platform analyst Kathleen Brooks said “more volatility” could be in the offing in the lead-up to the first round of the French elections. “The risk of a win for Marine Le Pen and a shift in parliamentary power in France to the hard right is fuelling the selloff in French stocks, and the selloff in French banks in particular,” she said.
The move has sparked a period of political uncertainty in Europe’s second-biggest economy and across the European Union as voting elsewhere saw a shift away from the centre. French left-wing star Raphael Glucksmann on Friday threw his weight behind a new coalition of the left in the runup to the historic elections, while Le Pen pledged a national unity government if her party wins.
“Soaring borrowing costs are already hitting the French government, as the perceived risk attached to a potential victory for the far right pushed the cost of sovereign debt higher,” warned Shore Markets analyst Joshua Mahony.
In Asia on Friday, the yen dropped against the dollar and Japanese shares rose as the Bank of Japan said it would trim its vast hoard of government bonds as it cautiously steps away from its long-running ultra-loose monetary policy. The central bank also kept interest rates unchanged after a two-day meeting.
– Key figures around 1015 GMT –
Paris – CAC 40: DOWN 2.3 percent at 7,527.57 points
Frankfurt – DAX: DOWN 1.2 percent at 18,039.65
EURO STOXX 50: DOWN 1.7 percent at 4,853.89
London – FTSE 100: DOWN 0.5 percent at 8,120.67
Tokyo – Nikkei 225: UP 0.2 percent at 38,814.56 (close)
Hong Kong – Hang Seng Index: DOWN 0.9 percent at 17,941.78 (close)
Shanghai – Composite: UP 0.1 percent at 3,032.63 (close)
New York – Dow Jones: DOWN 0.2 percent at 38,647.10 (close)
Euro/dollar: DOWN at $1.0684 from $1.0746 on Thursday
Euro/pound: DOWN at 84.12 pence from 84.15 pence
Dollar/yen: UP at 157.11 yen from 157.03 yen
Pound/dollar: DOWN at $1.2701 from $1.2766
West Texas Intermediate: DOWN 0.3 percent at $78.36 per barrel
Brent North Sea Crude: DOWN 0.3 percent at $82.53 per barrel
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© 2024 AFP
