![French election results boost stocks and the euro](https://media.cnn.com/api/v1/images/stellar/prod/gettyimages-2156454374.jpg?c=16x9&q=w_800,c_fill)
French election results boost stocks and the euro
CNN
French stocks and the euro rallied Monday after results from the first round of elections suggested the far right will inflict a heavy defeat on President Emmanual Macron but fall short of winning an outright majority in parliament.
French stocks and the euro rallied Monday after results from the first round of elections suggested the far right will inflict a heavy defeat on President Emmanuel Macron but fall short of winning an outright majority in parliament. France’s CAC 40 index, which represents 40 of the biggest companies listed in Paris, rose 2.7% at the open. The index closed 1% higher on the day but is still almost 6% below its level before Macron called the snap election on June 9. Bank stocks, a bellwether for the economy, reversed some of the heavy losses they have suffered in recent weeks. Shares in BNP Paribas closed 3.6% higher, while Societe Generale and Credit Agricole climbed 3.1% and 2.8% respectively. The euro, which tumbled after Macron’s surprise election announcement, briefly touched the strongest level against the dollar in more than two weeks Monday. Yields on French government bonds, or returns demanded by investors for the risk of holding them, were broadly unchanged after widening significantly compared with their ultra-safe German equivalents in recent days. On Friday, the risk premium over German government debt hit its highest level since the eurozone crisis more than a decade ago. While the defeat for Macron is likely bad news for France’s precarious finances — a hung parliament could mean gridlock — the worst-case scenarios for investors appear to have receded. Just two weeks ago, they were fretting about the possibility that France could be heading for a financial crisis similar to the 2022 UK market crash triggered by unfunded tax cuts pushed by former Prime Minister Liz Truss.