According to reports on PUNCH, Europe’s stock markets slid in opening deals on Monday as investors fretted over French political uncertainty following snap elections, in which a hung parliament appeared the likeliest outcome.
In the eurozone, the Paris CAC 40 benchmark stocks index sank 0.4 percent and Frankfurt’s DAX shed 0.1 percent, while London’s FTSE 100 index was down 0.3 percent in value. Meanwhile, the euro stumbled against the dollar and pound.
France’s left was set to emerge as the biggest group in a new parliament, beating out a resurgent far right in a vote called by President Emmanuel Macron three years ahead of schedule.
Macron’s centrist alliance will have dozens fewer members of parliament but held up better than expected and could end up in second place.
Yet no group is expected to have won an absolute majority in the second-biggest economy in the European Union.
“Political uncertainty in France is set to remain elevated in the coming weeks until there is greater clarity over what form the next government will take,” noted MUFG economist Lee Hardman.
“With all three major parties falling well short of an absolute majority in parliament, it remains likely that the next government will struggle to implement their policy agenda.”
The initial slide in European stock markets highlights investor anxiety over the political stability of one of the EU's key economies.
Market analysts will be closely watching how the situation unfolds in France, as prolonged political uncertainty could lead to more volatility in the European stock markets.
Stakeholders will be keen to see how the political landscape stabilizes and what impact this will have on economic policies moving forward.