(CercleFinance.com) – After gaining up to 2.8%, shortly after the opening, the Paris Stock Exchange saw its gains slowly erode. It is currently up nearly 1.5%, around 7,590 points, notably driven by banking stocks with +4.8% for Société Générale and +4% for Crédit Agricole.
Note that the 40 CAC values are in green the day after the first round of the legislative elections.
The final results show RN and its allies leading the vote, with more than 33% of the vote, ahead of the New Popular Front (28%) and Ensemble, the presidential coalition (20.8%).
The prospect of a divided Assembly was considered the most likely and this scenario should not unduly disrupt the markets which had anticipated it.
‘Even if the probability of an absolute majority of the National Rally is not completely zero at this stage, the first declarations of the different political groups on possible withdrawals and therefore the opening of negotiations with a view to the second round will make the scenario of the absolute majority difficult’, analyzes Alexandre Baradez, head of market analysis at IG France
This deadlock will nevertheless force Emmanuel Macron to coexist with an a priori hostile Assembly during the last three years of his second term.
‘The next government will be less willing and less capable of reducing France’s budget deficit than the outgoing government,’ worries Jack Allen-Reynolds, economist at Capital Economics.
On the bond front, the 10-year German Bund reached 2.56% (+8 pts), while the French OAT of the same maturity is at 3.32% (+3 pts), i.e. a spread of 76 pts, significantly reduced compared to the 85 pts base on Friday.
Investors’ attention is also captured by numerous indicators.
Thus, the HCOB PMI index for the French manufacturing industry, produced by S&P Global, fell from 46.4 in May to 45.4 in June, highlighting an acceleration in the contraction of the sector compared to the previous month.
Furthermore, the HCOB PMI index for the euro zone manufacturing industry, produced by S&P Global, fell from 47.3 in May to 45.8 in June, highlighting a sharp deterioration in the sector’s economic situation, as well as an acceleration of its contraction.
Released this morning, China’s manufacturing purchasing managers’ index in June stood at 49.5, unchanged from May, according to data from the National Bureau of Statistics (NBS).
Still below the threshold of 50 points indicating a contraction in activity, this indicator ‘highlights the persistent weakness of the economy’ from the point of view of Commerzbank analysts.
Operators will also read the latest inflation figures in the euro zone tomorrow, then the ISM services index in the United States on Wednesday and the monthly American employment report, scheduled for Friday.
In French corporate news, Airbus announced that it has entered into a binding agreement with Spirit AeroSystems for the potential acquisition of major activities related to its own commercial aircraft programs, in order to ensure the stability of their supply.
Vivendi announces the conclusion of a settlement agreement with all institutional investors who demanded financial compensation for allegedly inaccurate financial communications from its former management between 2000 and 2002.
Atos announced on Sunday that it had reached an agreement on the main terms of a financial restructuring plan with a group of banks and bondholders.
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