(Article under update)
Stock Market, Europe Cautious After New Popular Front Victory
They seemed to have lasted a short time Post-French vote concerns on markets that have already recovered their initial losses and have now moved into positive territory, albeit cautiously. The best are Amsterdam (+0.3%) and Frankfurt (+0.3%)despite the fact that in Germany in May imports fell by 6.6% on the month and exports by 3.6% (worse than expected). For Milan +0.3% while Paris, struggling with the consequences of the polls, now marks a +0.26%The only one still in negative territory is London, which is down 0.2%. Purchases at the continental level are concentrated in tech and insurance.
Specifically, to Business Square Fineco continues its rally (+2.8%), followed on the podium by Iveco (+1.8%) and Mps (+1.3%), always grappling with rumours about the banking risk. At the bottom Stellantis (-1%), luxury and pharmaceuticals.
In France, an unexpected victory for the left and the holding of the presidential coalition of Emmanuel Macron They thwarted the attempts of Marine Le Pen to bring the far right to power, but no political force has achieved an absolute majority of 289 deputies in the National Assembly, opening a phase of strong political uncertainty.
The New Popular Frontthe left-wing alliance that was formed to counter the advance of the National Rallywon the largest number of seats to the National Assembly (182). The centrist formation supporting President Macron, Ensemble, obtained 168 while Marine Le Pen’s Rassemblement National, allied with a part of the Republicans led by the party president Eric Ciottiis third with 143 elected deputies. The results have raised concerns about political deadlock and markets fear the prospect of a left-wing government due to the risks to the stability of the budget.
Spread down
Declining start for the spread between BTp and Bund after the unexpected outcome of the elections in France that handed victory to the left without, however, a clear scenario for the formation of the new Government. In the initial stages, the impact on Italian government bonds seems modest and the yield spread between the benchmark ten-year BTP (Isin IT0005560948) and the German Bund of the same maturity stands at 138 basis points, down 3 cents compared to the previous reference. The yield on the benchmark 10-year BTP also fell slightly, marking a first position at 3.93% compared to 3.94% at the closing last Friday.
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