The defeat of Emmanuel Macron's party in the European Parliament elections, held just under a week ago, generated a series of repercussions, Not only at a political level, but the French market, the performance of the euro and the main stock markets in Europe also felt the impact of the elections. By sectors, the financial sector has suffered the greatest losses so far this week.
The victory of the extreme right in France, in the hands of Marine Le Pen, caused the executive to announce the dissolution of the constituent Assembly and the call to the polls for early elections in French territory. On the following day, the effects of the decision began to be evident with the fall of the French markets, The CAC 40 index being the one with the most representative drop, up to 5.6% according to Bloomberg's Friday report (2.4% on Friday only).
French Economy Minister Bruno Le Maire anticipated on Friday morning that the political unrest over President Macron's recent decisions They could trigger a “financial crisis”, not only in that country but throughout the continent.
Following this line, the euro has been another of those affected by losing performance against the dollar. Since Monday, the currency has fallen from US$1.07 per euro to US$1.067 as of Friday, the biggest drop in the currency in two months. and as a sign of the uncertainty generated in the markets of Europe and the world by the recent political decisions of the President of France.
On the other hand, The weakness of the currency has contributed to the appreciation of the dollar. The dollar index, which compares the U.S. currency to a basket of six peers, rose 0.3% on the day and 0.6% on the week, to 105.57.
Fall of European stock markets
The risks of losing performance in the French stock market are that other markets in the region catch the bearish trend and cause a further fall in the main indicators. According to Bloomberg, Europe's seven main stock markets are already reporting falls close to 2.5% on average, with France's CAC 40 having the steepest loss at 2.4%.
The Spanish Ibex index reports a fall of 0.7%, representing the largest loss since March of last year. On the other hand, the Italian Ftse index has suffered a drop of 5%, also the lowest since March 2023. The Eurostoxx 50 index, which groups together the performance of the 50 main stocks in Europe, reports a drop (on Friday) of 1.67%.
Most affected sectors
The Eurostoxx index also allows us to see which sectors have been most affected by the political-economic imbalance unleashed in France. As predicted by the French Economy Minister, The European financial sector is the most affected with losses in banks such as Unicredit from Italy (5.89%), AXA from France (5.72%), BNP Paribas also from France (3.65%) and Bbva from Spain (2.97%).
Likewise, the industrial sector has also been affected due to a sectoral drop of 2.66%, with the electrical equipment division and construction products being the most affected. By brands, Schneider Electric and Cie de Saint Gobain (both French companies) were the most affected with drops in value of 3.92% and 4.92% respectively.
