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11/06/24
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European Shares Down as Banks Rattled by Political Tremors in France
On Tuesday, European shares closed lower as banks across the continent fell as investors worried over France’s political uncertainties while bracing for the U.S. Federal Reserve’s policy meeting later this week.
The STOXX 600 continent-wide index closed 0.9% lower, recording its biggest single-day fall in 2 weeks, while Spain’s and Italy’s bank-heavy benchmarks dropped 1.6% and 1.9%, respectively.
The selloff was led by banks and the sector closed 2.2% lower, extending Monday’s declines.
France’s CAC 40 index dropped 1.33% as it extended losses from the prior session when President Emmanuel Macron called a snap election after a heavy defeat of his allies at the hands of the far-right National Rally in European elections.
Macron’s gamble afforded the far-right an opportunity to gain real political power after years on the sidelines and will likely weaken his presidency 3 years before it is due to end.
The basic resources index, including Europe’s biggest mining firms, fell nearly 2% as most metal prices were under pressure due to the US dollar being firmer and worries over demand in top consumer China.
On the data front, the labor market in Britain in April showed more signs of easing as the unemployment rate was higher. London’s FTSE 100 closed about 1% down.
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