Paris stock market no longer Europe's biggest, top French firms lost over 10%
France’s political upheaval has led the country to lose its spot as Europe’s biggest equity market, less than two years after stealing that title from the UK.
President Emmanuel Macron’s shock announcement of a snap election sparked a rout that wiped off about $258 billion from the market capitalization of French firms last week. Shares of banks Societe Generale SA, BNP Paribas SA and Credit Agricole SA all big holders of government debt lost more than 10% each.
Stocks in the country are now collectively worth about $3.13 trillion, narrowly losing out to the UK at $3.18 trillion, according to data compiled by Bloomberg. The CAC 40 Index has erased all its gains for 2024 a sharp reversal from scaling record highs a month ago.
“We are in a period where there are no certainties for three to four weeks and the market could unfortunately become more unstable,” said Alberto Tocchio, a portfolio manager at Kairos Partners.
At the same time, a confluence of factors including improving global growth and a pickup in merger activity has made UK stocks popular with investors again. Although the country is preparing for its own general election, the outcome is seen as being more stable with the opposition Labour party leading in polls by a wide margin.
“We like UK stocks for valuation reasons but also as a portfolio diversifier given their attractive sector profile,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg. “On top of that, the political uncertainty seems to be higher elsewhere, at least
