European stocks rise as investors shrug off French political instability concerns

FE Team | Published: December 06, 2024 00:10:08

Dec 5: European stocks hovered near one-month highs on Thursday as investors shrugged off concerns about political instability in France after lawmakers voted to topple Prime Minister Michel Barnier's government in a widely expected move, reports Reuters.
The pan-European STOXX 600 rose 0.2 per cent by 0945 GMT, extending gains for a sixth consecutive session. France's CAC 40 climbed 0.3 per cent, having touched a three-week high at one point.
Barnier is expected to resign on Thursday, making him the shortest serving prime minister in modern French history. France now risks ending the year without a stable government or a 2025 budget, although the constitution allows special measures that would avert a US-style government shutdown.
"The reaction you're seeing is ultimately equity markets shrugging off this vote because in many ways it had been widely expected, so it hasn't really come as a shock," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
The risk premium investors demand to hold French debt rather than German Bunds dropped from its highest levels in over 12 years as market participants had been expecting a muted reaction or even a "buy on rumours, sell on news" response to the fall of the government.
President Macron, who is expected to deliver a televised address to the country at 1900 GMT, is expected to name a premier before a ceremony to reopen the Notre-Dame Cathedral on Saturday.
All three of Wall Street's main indexes notched record closing highs on Wednesday, thanks to upbeat results from Salesforce and comments from Federal Reserve Chair Jerome Powell.
Major French lenders rose, with BNP Paribas, Societe Generale and Credit Agricole up between 1.7 per cent per cent and 2.8 per cent.
German copper producer Aurubis jumped 14 per cent after a better-than-expected dividend proposal.
Shell fell 1 per cent after the British oil major and Norway's Equinor said they would merge their British offshore oil and gas assets into an equal joint venture.
Safran fell 4.9 per cent after the French jet engine maker issued new financial targets.
French oil firm TotalEnergies rose 1 per cent after RBC upgraded its shares to "outperform" from "sector perform".