French Stocks Least Popular in Europe after Macron's Snap Election Call

French Stocks Least Popular in Europe after Macron's Snap Election Call

Elena Dubois
2 min read

French Stocks Lose Favor as Macron Calls Snap Election

French stocks have taken a hit, becoming the least popular in Europe after President Emmanuel Macron's decision to call a snap election. According to a recent Bank of America Corp. survey, investors are expected to be underweight in French equities over the next 12 months. This significant shift follows the CAC 40 Index, France's main stock market index, experiencing its worst drop in over two years, resulting in a market capitalization loss of $258 billion. Although the index has slightly rebounded, it remains influenced by far-right leader Marine Le Pen's assurances of working with Macron if she wins the election.

Investors are apprehensive that Macron's centrist, pro-business Renaissance party might lose more ground in the forthcoming two-round parliamentary elections, scheduled for June 30 and July 7. Consequently, Citigroup Inc. has downgraded the wider European region to neutral, and Bank of America's survey indicates a less bullish outlook for European equities. Despite these concerns, European equities are still a preferred choice globally, with more investors overweight on the region compared to the US.

Key Takeaways

  • French stocks are the least popular in Europe, according to a Bank of America survey.
  • Investors are more likely to be underweight French equities over the next 12 months.
  • The CAC 40 Index experienced a significant drop, wiping out $258 billion in market capitalization.
  • The yield on French 10-year bonds over German peers saw its biggest weekly jump on record.
  • Barclays strategists expect European equity price action to remain erratic until the second round of French voting.


The abrupt shift in investor sentiment towards French equities, now the least popular in Europe, is primarily driven by political uncertainty following President Macron's snap election call. This has led to significant market volatility, with the CAC 40's sharp decline and a widening yield spread between French and German bonds. Short-term consequences include heightened market instability and reduced investor confidence, potentially leading to further capital outflows. Long-term, if political instability persists, it could hinder economic reforms and fiscal policy effectiveness, impacting France's economic growth and global market positioning.

Did You Know?

  • CAC 40 Index: The CAC 40 is the benchmark stock market index in France, representing the 40 largest companies listed on the Euronext Paris stock exchange. It is often used as a measure of the overall health of the French economy and stock market.
  • Market Capitalization: This term refers to the total value of all a company's shares of stock. It is calculated by multiplying the current share price by the total number of outstanding shares. In the context of the CAC 40, market capitalization refers to the combined value of all 40 companies' shares.
  • Yield on French 10-Year Bonds: This is the interest rate paid by the French government on its 10-year bonds. It is a key indicator of the perceived risk of investing in these bonds. When the yield rises, it typically indicates that investors are demanding a higher return to compensate for increased risk, often due to economic or political uncertainty.

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