Economic news

French stocks drag European shares lower on political woes

  • Banks lead sectoral declines
  • H&M rises on UBS upgrade
  • STOXX 600 down 0.3%

June 14 (Reuters) - European shares lost ground on Friday, with the benchmark index poised for a weekly loss as investors remained on the sidelines amid the political uncertainty in France.

The pan-European STOXX 600 was down 0.3% as of 0832 GMT and has lost 1.7% so far this week.

France's benchmark CAC 40 index shed nearly 1.3%, underperforming the region's bourses, and the risk premium on domestic bonds hit a seven-year high as investors remained unnerved by the political situation.

France's leftwing parties will reveal the political manifesto for their renewed alliance on Friday in a bid to challenge the far-right's National Rally (RN), leading the polls for upcoming snap parliamentary elections.

"If (President Emmanuel) Macron's party loses to the RN, he will likely have to serve the next three years of his presidency with a legislature dominated by them. Markets worry about this outcome," Frederique Carrier, head of investment strategy for RBC Wealth Management in the British Isles and Asia, said in a note.

"A shift to a more expansive fiscal policy in France could have wide-ranging repercussions on the region."

Food and beverages and healthcare were amongst the few bright spots, up around 0.4% each, while most other sectors were subdued.

European lenders slid 1.1% and led declines, with French banks BNP Paribas, Societe Generale and Credit Agricole dropping more than 3% each.

Automobile-related shares extended losses, falling nearly 0.7% to their lowest levels in more than four months, on uncertainty over how China might respond to the EU's new tariffs on imported Chinese electric vehicles.

Germany is reportedly trying to prevent or soften the bloc's tariff.

On the data front, French consumer prices rose 2.6% in May, slightly lower from a preliminary reading of a 2.7% increase published in late May.

Among stocks, British homebuilder Bellway fell 3% after rival Crest Nicholson rejected its revised and unsolicited 650-million-pound ($828 million) takeover offer.

Crest Nicholson's shares jumped nearly 8%.

H&M advanced 1.9% after UBS upgraded the world's second-largest listed fashion retailer to "buy" from "neutral."

Reporting by Shristi Achar A in Bengaluru; Editing by Sherry Jacob-Phillips and Savio D'Souza

Source: Reuters


To leave a comment you must or Join us


More news


Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree