Euro And European Markets Advance After Far Right Party Fell Short of Majority In French Election

Bridgette Randall
01 Jul, 2024
Frankfurt

European markets rebounded and the risk premium for French bonds receded after the far-right party failed to win a majority in the first round of the French parliamentary elections on Sunday. 

The CAC-40 index soared 1.5% after Marie Le Pen's National Rally Party won 34% of the vote in the unexpected snap legislative assembly elections. 

The National Rally Party won 34.1%, the left-wing New Popular Front Party won 28.1%, and the centrist Renaissance Party coalition controlled by President Emmanuel Macron received 20.8%, according to the preliminary results released by the Interior Ministry. 

France is headed for the second round of elections on July 7. 

A private survey indicated the eurozone's business activity contracted less than expected in June. 

HCOB's final eurozone purchasing managers' index slipped to 45.8 in June, less than the initial estimate of 45.6, S&P Global reported on Monday. 

 

Europe Indexes and Yields

The DAX index increased by 0.3% to 18,289.86; the CAC-40 index gained by 1.5% to 7,588.25; and the FTSE 100 index rose by 0.3% to 8,189.08. 

The yield on 10-year German bonds edged higher to 2.56%; French bonds inched higher to 3.26%; the UK gilts edged higher to 4.22%; and Italian bonds decreased to 4.06%.

The euro edged lower to $1.07; the British pound inched lower to $1.266; and the U.S. dollar advanced to 90.12 Swiss cents.

Brent crude increased $0.37 to $85.37 a barrel, and the Dutch TTF natural gas fell by €0.27 to €34.23 per MWh.

 

Europe Stock Movers

French banks rebounded after the announcement of national election results, indicating that the far-right party fell short of an absolute majority in the first round of the national election. 

BNP Paribas jumped 3.5% to €61.85, Credit Agricole gained 4.1% to €13.27, and Societe Generale advanced 5% to €23.03. 

Airbus SE increased 2.2% to €131.08 after the European airplane maker entered into a bid agreement with Spirit AeroSystems to acquire a business unit supplying products and systems to the company. 

Separately, Boeing agreed to acquire the majority of the assets owned by Spirit AeroSystems in an all-stock deal that valued the equity of the company at $4.7 billion, or $37.25 per share. 

The total transaction is valued at $8.3 billion, including the total debt of the company. 

Valneva soared 5.3% to €3.35 after the European Commission approved marketing of the company's chikungunya vaccine, IXCHIQ, for adults 18 years and older. 

Petrofac Ltd. jumped 3.5% to 13.47 pence after the company extended its interest payment moratorium on its secured senior notes to July 25 from June 30. 

Anglo American declined 2.1% to 2,450.0 pence after the company suspended its activities in a coal mine in Queensland, Australia, following an underground coal gas ignition incident.