European Stocks Fall as Left-Wing Alliance Wins French Snap Polls

French Left-Wing Alliance Win in Snap Polls Causes European Stocks to Fall

European stocks took a hit on Monday as investors reacted to the surprising victory of a left-wing alliance in French snap polls, where no single group secured a majority.

The left emerged as the largest group in France’s new National Assembly, surpassing the far-right and even President Emmanuel Macron’s centrist alliance. While Macron’s party obtained fewer seats than expected, they still held up better than anticipated.

The outcome of the elections, which left no bloc with a clear majority, has created political uncertainty in France, unlike anything seen in recent history. Despite initial losses, European equities rebounded as the far-right National Rally of Marine Le Pen did not secure a majority. However, major markets like Paris, Frankfurt, and London closed slightly in the red.

Investors expressed concerns about the costly spending pledges made by the far-right party before the elections. The political and budgetary uncertainties in France have also raised questions about the country’s leadership position within the eurozone.

On Wall Street, most indices saw gains, with Boeing’s shares rising over two percent after reaching a deal with the US Department of Justice regarding the 737 MAX crashes. The plea deal, which includes additional fines, allowed Boeing to avoid a criminal trial.

In Asia, stock markets mostly declined, with Hong Kong’s Hang Seng Index closing down more than 1.5 percent. Tokyo’s Nikkei index fluctuated throughout the day before ending slightly down, while Taipei saw gains due to a surge in shares of chipmaking giant TSMC.

Overall, the global market sentiment remains cautious as investors wait to see how the new political landscape in France will unfold and its impact on the economy.