Budget Fight Looms With Paris Market Looking Frail: Taking Stock Michael Msika and Julien Ponthus As the political stakes rise in France, the country’s equities are looking vulnerable. They are under-performing, under-owned and worst of all perhaps, Europe’s most unloved. Lawmakers in Paris are due to kick off a parliamentary contest on Thursday over the 2027 budget, little more than six months out from presidential elections and against a gloomy market backdrop.
The CAC 40 is the only significant European benchmark to lose ground this year, sliding 2.3%. There’s more to that than just politics, but the turmoil of the past two years hasn’t built confidence. In fact, the French index is set for its deepest annual underperformance against the Stoxx Europe 600 since 2010 and trailing the regional benchmark for a third year in a row.
French stocks still haven’t recovered from Emmanuel Macron’s surprise decision to call general elections in June 2024, or the political crisis that ensued. Since then, the CAC 40 is flat, missing out on a rally in its neighbors. Germany’s DAX has jumped 36%, Italy’s FTSE MIB has surged nearly 50% and Spain’s Ibex 35 is up 70%.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing