The Paris Stock Exchange is trading slightly lower following the uncertainty surrounding the French elections

The Paris Stock Exchange is trading slightly lower following the uncertainty surrounding the French elections
The Paris Stock Exchange is trading slightly lower following the uncertainty surrounding the French elections

The Cac 40 index of the Paris Stock Exchange has reacted with moderate declines to the result of the legislative elections in the country, which have given victory to the left-wing coalition New Popular Front After the second round of the elections, ahead of Together for the Republic, which is close to the current president of France, Emmanuel Macronthus leaving the far-right National Rally in third place. The main selective index of the Paris Stock Exchange opened the session on Monday with a 0.49% declineto 7,637.89 points, although it reduced its fall to 0.15% as trading progressed. Among the stocks that started the session on the rise, the rise of Michelin (0,69%), Dassault (0,48%) y Sanofi (0.21%), while at the opposite end, the lowest values ​​were Teleperfomance (-2,65%), Stellantis (-1,28%) y BNP Paribas (-1,18%).

ING Research analysts point out that the second round of elections produced a surprising result, which means a hung parliament and two possible main scenarios: difficult negotiations to form a a coalition or a technocratic government. In this regard, they recall the positive market reaction after the first round, in which they won National Regroupingsuggested that investors were more comfortable with the far right than with the far left, which is perceived as a greater danger to France’s already fragile fiscal position. As such, one of the NFP’s leaders, Jean-Luc Melenchon, said he plans to strictly implement its programme, which includes an increase in public spending to support social measures With higher minimum wages and the reversal of Macron’s reform that raised the retirement age, which is probably behind the euro trading around 0.2% below its Friday close. “A hung parliament will struggle to achieve fiscal consolidation and there are some risks related to a possible left-wing government,” they warn, although they believe that since the centrist group came second, this would offer some balance, leading one to intuitively think that “markets will favour a technocratic government rather than a NFP-led coalition.”

 
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