French Stocks Rebound After Left-Wing Victory in Parliamentary Elections

French Stocks Rebound After Left-Wing Victory in Parliamentary Elections

Claire Dubois
2 min read

French Stocks Rebound After Left-Wing Victory in Parliamentary Elections

French stocks have surged 0.5% in Paris following a surprising left-wing win in parliamentary elections, creating a hung parliament. The CAC 40, despite the increase, remains 3.7% lower since the unexpected election announcement on June 9. The New Popular Front, comprising France Unbowed, secured the most seats but fell short of the majority needed for control. Market optimism is tempered, amid expectations of a potential center-left coalition that could moderate more leftist policies.

Key Takeaways

  • French stocks bounce back, CAC 40 rises by 0.5% post-election.
  • The New Popular Front wins the most seats, but lacks a clear majority.
  • Investors approach cautiously, awaiting coalition negotiations.
  • French banks face scrutiny amidst political uncertainty.
  • Delivery Hero encounters a possible €400 million fine for anti-competitive behavior.


The left-wing victory in French parliamentary elections has stimulated cautious optimism in the stock market, with the CAC 40 rising by 0.5%. Investors are responding to a projection of a far-right minority, although gains are expected to be restricted by persistent uncertainty. Banking stocks, notably BNP Paribas and Societe Generale, are under observation due to their significant exposure to sovereign debt and potential elevated tax and capital requirements under leftist policies. Short-term effects involve careful trading and potential penalties for companies like Delivery Hero, while the long-term implications depend on the stability of an emerging center-left coalition.

Did You Know?

  • New Popular Front Alliance: The New Popular Front is a political alliance in France, including parties such as France Unbowed. Although it secured the most seats in the recent parliamentary elections, it did not attain the necessary 289 seats for a majority. This outcome has led to political ambiguity as no single party or alliance can govern without forming a coalition.
  • CAC 40: The CAC 40 is the benchmark stock market index of the Paris Bourse, consisting of the 40 largest and most actively traded French companies. The index's performance is a vital indicator of the overall health of the French stock market. The 0.5% rise following political uncertainties signifies a partial recovery, yet it remains significantly lower since the snap election announcement.
  • BNP Paribas and Societe Generale: BNP Paribas and Societe Generale, two of France's largest banks, are under scrutiny due to their substantial holdings of French sovereign debt, potentially exposing them to increased capital requirements and taxes under potential leftist policies. This situation adds to the overall risk in the banking sector amid political uncertainty.

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