Legislative elections: two days before the first round, the Paris Stock Exchange ends with its worst monthly performance in two years

Predictable conclusion. On the same downward trend as since the announcement of the dissolution of the National Assembly by Emmanuel Macron on June 9, two days before the first round of the legislative elections, the leading CAC 40 index closed with a loss of 0.68% on the Paris Stock Exchange this Friday, ending at 7,479.40 points, its lowest level since January 25. The gap between the interest rate on France’s ten-year bond and that of Germany, the benchmark in Europe, is also the largest since 2012.

As often noted during the month of June, the French Stock Exchange fell sharply on Friday compared to other European markets: Frankfurt ended up 0.14% and London down 0.19%, supported by consistent data. to the expectations of economists on inflation, particularly in the United States. Over the month, these two stock markets fell by less than 1.5%.

And the quarterly results are not much better for the Paris Stock Exchange. Here again, we have to go back two years, to the second quarter of 2022, to find a worse performance (-8.85%) than that of the last three months. Over the first six months of the year, the performance of the Parisian market was ultimately negative (-0.85%), while the CAC 40 nevertheless broke its records during the period, climbing to 8,259.19 points in meeting on May 10.

The spectre of the RN is worrying

On Friday, as since the announcement of the dissolution of the Assembly on June 9, investors especially wanted to limit their exposure to investments that they perceive as the riskiest, whether shares or French debt, explained Marine Mazet, bond analyst at Nomura.

However, “the first round should not clear up all the horizons and we will have to take the seat projections with a pinch of salt, because there will be many duels or triangulars” and the alliances and transfers of votes are still uncertain, stressed Ms. Mazet. Already not very confident in France’s ability to bring its public deficit below the threshold of 3% of its gross domestic product (GDP) by 2027, the stock market fears the implementation of expensive economic programs.

Banks are plunging

This was also felt on the bond market: the interest rate on the French 10-year bond, the benchmark maturity, reached its highest level since November and was trading around 3.29% on Friday at the close of trading, compared with 2.48% for its German equivalent.

In terms of values, the worst performance over the month on the CAC 40 goes to Société Générale, whose shares fell by almost 20%. The entire banking sector suffered, with a drop of more than 14% for Crédit Agricole and more than 12% for BNP Paribas. Sensitive values ​​due to their links with the State also suffered from investor distrust, such as Vinci (-14.04%) which manages motorway concessions or Engie (-1416%).

Airbus (-17.73%), after lowering its 2024 financial targets, and Eurofins Scientific (-15.91%), criticized by a fund specializing in short selling on Monday, also stumbled over the month as a whole. Barely three companies ended June higher than they had started it: Kering (+6.72%), which rebounded but whose share price is a third lower than a year ago, and, in very slight progression, Sanofi (+0.20%) and Capgemini (+0.05%).