The Paris CAC 40 dropped more than 2% at the open while the Frankfurt DAX and London were also well down
European markets slumped with the euro on Monday after a win for far-right parties in European Union elections and French President Emmanuel Macron’s decision to call a snap parliamentary poll fuelled uncertainty in the bloc.
The losses came after a mostly negative start to the week for Asian equities as a mixed jobs report eased concerns about the US economy but diminished hopes for interest rate cuts.
European traders sold up after a strong night for right-wing parties, who finished first in France, Italy and Austria and came second in Germany and the Netherlands, as per preliminary results.
Spanish Prime Minister Pedro Sanchez’s Socialists were beaten by the right-wing Popular Party.
The Paris CAC 40 dropped more than 2% at the open while the Frankfurt DAX and pan-European Stoxx 600 were also well down.
London was also lower.
The euro weakened against the dollar and sterling.
Big losses for the liberal party of Macron, which lost out to the National Rally party led by Marine Le Pen, resulted in the president swiftly calling a snap parliamentary vote, fuelling uncertainty in the key European Union member.
France will vote for a new National Assembly on June 30, with a second round on July 7, Macron announced late Sunday.
I am confident in the capacity of the French people to make the right choice for themselves and for future generations, he stated on social media platform X.
Swedish lender Skandinaviska Enskilda Banken AB said in a note to clients: The EU is facing a historically challenging time with both internal and external ‘cracking’ in systemic issues that require increased – not decreased – cooperation. Difficult negotiations now await.
Meanwhile, with the Fed meeting this week, investors are keenly awaiting its updated “dot plot” outlook for borrowing costs, with commentators split on how many, if any, cuts are in the pipeline.
All three indexes on Wall Street closed lower Friday – but with the S&P 500 and Nasdaq still near record highs – after data showed the US economy added far more jobs than estimated last month.
Asian equities struggled Monday, with Tokyo and Jakarta gaining but losses in Seoul, Singapore, Manila, Bangkok and Wellington.
Hong Kong, Shanghai, Sydney and Taipei were shut for holidays.
