Stock markets under heavy pressure due to uncertainty surrounding France
Published: Friday, Jun 14th 2024, 19:10
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The uncertainty surrounding the call for new elections by French President Emmanuel Macron is weighing heavily on the stock markets in Europe and also in Switzerland. The euro has also come under significant pressure against both the US dollar and the Swiss franc.
The losses on the Swiss market were still limited on Friday, although this was mainly due to gains by the defensive heavyweights Nestlé, Roche and Novartis. The leading SMI index closed down 0.42% at 12,045 points, resulting in a loss of 1.7% for the week as a whole.
The stock market turbulence in France itself was much stronger. There, the French CAC 40 fell by 2.7 percent on Friday. Over the course of the week, the French benchmark index fell by 6.2%, the sharpest decline since the beginning of 2022. Germany's leading index, the Dax, also continued its downward trend at the end of the week (-1.4%), resulting in a decline of 3% for the week as a whole.
The euro also came under further pressure due to political uncertainty. The single currency reached a low of CHF 0.9509 against the franc on Friday, and the euro is currently trading at around CHF 0.9530. The EUR/CHF pair last traded well below 0.95 in February. Against the US dollar, the euro fell below the 1.07 dollar mark on Friday.
Everyone surprised
Macron's decision to hold new elections in the country took everyone by surprise, said one analyst. There are now fears on the markets that Eurosceptic forces from the right or left of the political spectrum will take power. This could have a negative impact on the already tense budget situation in France and ultimately also on the stability of the entire currency area.
According to another market observer, the political uncertainty in the EU's second-largest economy is currently causing investors to steer clear of French equities, which has also spread to other investments in Europe. Added to this are the tensions with China. "The shock of a potential trade dispute between the EU and China seems to be deep-seated among investors."
©Keystone/SDA
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