Europe stocks fall at open on French uncertainty

Europe stocks fall at open on French uncertainty

/ 03:52 PM July 08, 2024

Traders works at the stock exchange in Frankfurt am Main, western Germany, on February 24, 2022.

Traders works at the stock exchange in Frankfurt am Main, western Germany, on February 24, 2022. European stock markets tumbled after Russia launched an attack on neighbouring Ukraine. (Photo by Daniel ROLAND / AFP)

London, United Kingdom — 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 percent and Frankfurt’s DAX shed 0.1 percent, while London’s FTSE 100 index was down 0.3 percent in value. The euro meanwhile stumbled against the dollar and pound.

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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.

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READ: Euro slips in Asian trade after snap French poll

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.”

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