Stock market in a doldrums: How does the French crisis affect the markets?

The French stock market is experiencing a period of turbulence since the announcement of the dissolution of the National Assembly and early legislative elections. Investors, concerned about political uncertainty and its consequences for the economy, have caused a drop in share prices. This French storm does not spare other European markets, which are also experiencing the collateral effects of French political instability.

French stock market under pressure

Last week, the CAC40 suffered a huge drop of 6.3% in just five sessions, a major and rather rare event. This weekly decline is comparable to:

• the 10.2% decline recorded at the end of February 2022 following the Russian invasion of Ukraine,
• the fall of 6.4% in October 2020 after the announcement of the second Covid-19 lockdown by Emmanuel Macron.

The most affected sectors are banks (-12% per week) and concessions and public services (-11%), penalized by political uncertainties. This pressure is expected to continue until the decision of early legislative elections at the end of June.

According to analysts, this sharp decline reflects investor concerns about political unrest in France. They are seen as a possible “black swan”. it can have large and unpredictable consequences on the economy.

What about the European and American stock markets?

The concern is not limited to France. of European stock market as a whole has taken a hit in the last few days. In contrast, US markets continue their ascent. The Nasdaq 100 even hit a new record last week with a 3.5% gain.

However, this performance hides disparities. only large cap stocks like Microsoft, Apple and Nvidia really stand out. They have increased by 4 to 9%. Small and medium-sized enterprises struggle to keep pace.

The question now is whether the French stock market will be able to recover from this political storm. A comeback is possible, especially if the results of the legislative elections help remove uncertainties and establish a stable government.

Ariela R.

My name is Ariela and I am 31 years old. I have been working in the field of web editing for 7 years. Je n’ai découvert le trading et la cryptomonnaie que depuis quelques années. Mais c’est un univers qui m’intéresse beaucoup. Et les sujets traités au sein de la platforme me permettent d’en apprendre davantage. Chanteuse à mes heures perdues, je cultive aussi une grande pasion pour la musique et la lection (et les animaux!)

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The views, opinions and opinions expressed in this article are solely those of the author and should not be taken as investment advice. Do your research before making any investment decisions.