Europe open: Shares rally, but France lower again on poll fears

14th Jun 2024 07:55

(Sharecast News) - European equities staged a slight rally at the open on Friday after a sell-off in the previous session. although French stocks were weaker again, fuelled by worries over the country's upcoming snap election.

The Stoxx 600 index was up 0.17% to 516.92 after the pan-regional benchmark plunged 2% on Thursday, marking its biggest fall in almost a year.

France's CAC 40 was down 0.39% at 7,677 and has fallen 3.7% this week after French President Emmanuel Macron shocked markets with his decision to call a snap poll in response to gains made by the far-right in European Parliament elections.

"Macron's surprise decision is likely to result in a hung parliament, which would translate into policy paralysis. The possibility of the far right obtaining an absolute majority of seats and gaining control of domestic policy cannot be fully discounted either," said Oxford Economics.

"Either way, France's challenges were recently highlighted by a rating downgrade from S&P, with France's poor fiscal metrics likely to remain in focus next week as the European Commission is expected to kick-start the process to place France under the Excessive Deficit Procedure."

"The political gridlock further reduces the chances of France undergoing fiscal consolidation."

In corporate news, British supermarket chain Tesco was up slightly after it held profit guidance for the year after reporting a 4.6% rise in underlying UK sales for the first quarter.

Shares in UK fintech Wise fell again after the money-transfer company on Thursday forecast lower income growth this year.

Reporting by Frank Prenesti for Sharecast.com