After gaining as much as 2.8% shortly after the opening, the Paris stock market is seeing its gains slowly eroded. It is currently up by nearly 1.5% at around 7,590 points, driven in particular by banking stocks with +4.8% for Société Générale and +4% for Crédit Agricole.

Note that the 40 CAC stocks are in green the day after the 1st round of legislative elections.

The final results show the RN and its allies in the lead, with over 33% of the vote, ahead of the Nouveau Front Populaire (28%) and Ensemble, the presidential coalition (20.8%).

The prospect of a divided Assembly was considered the most likely, and this scenario should not unduly upset the markets, which had anticipated it well.

Even if the probability of an absolute majority for the Rassemblement National is not completely nil at this stage, the first declarations by the various political formations on possible withdrawals and therefore the opening of negotiations for the second round will make the scenario of an absolute majority difficult," analyzes Alexandre Baradez, Head of Market Analysis at IG France

This deadlocked situation will nevertheless force Emmanuel Macron to cohabit with an a priori hostile Assembly during the last three years of his second term.

The next government will be less willing and less able to reduce France's budget deficit than the outgoing one", worries Jack Allen-Reynolds, economist at Capital Economics.

On the bond front, the German 10-year bund reached 2.56% (+8pts), while the French OAT of the same maturity was at 3.32% (+3pts), giving a spread of 76pts, significantly reduced from Friday's 85pts.

Investors' attention was also focused on a number of indicators.

The HCOB PMI index for French manufacturing, produced by S&P Global, fell from 46.4 in May to 45.4 in June, highlighting an acceleration in the sector's contraction compared with the previous month.

Meanwhile, the HCOB PMI index for Eurozone manufacturing industry, produced by S&P Global, fell from 47.3 in May to 45.8 in June, highlighting a sharp deterioration in the sector's economic situation, as well as an acceleration in its contraction.

Released this morning, China's manufacturing PMI for June stood at 49.5, unchanged from May, according to data from the State Bureau of Statistics (BES).

Still below the 50-point threshold indicating a contraction in activity, this indicator 'highlights the persistent weakness of the economy' in the view of Commerzbank analysts.

Tomorrow, traders will also take note of the latest eurozone inflation figures, followed by the US ISM services index on Wednesday and the monthly US employment report, scheduled for Friday.

In French company news, Airbus announces that it has reached a binding agreement with Spirit AeroSystems for the potential acquisition of major activities linked to its own commercial aircraft programs, in order to ensure the stability of their supply.

Vivendi announced that it had reached a settlement agreement with all institutional investors seeking financial compensation for allegedly inaccurate financial communications by its former management between 2000 and 2002.

Atos announced on Sunday that it had reached an agreement on the main terms of a financial restructuring plan with a group of banks and bondholders.

Copyright (c) 2024 CercleFinance.com. All rights reserved.