Capital Economy, Business and Finance
French stocks rallied yesterday after results from the first round of the parliamentary elections indicated the country was heading towards a hung parliament. Projections for the second round have the far-right Rassemblement National gaining the most seats but falling short of an outright majority. News of the results sent the French CAC 40 index 2.7 per cent up early on Monday before settling at a 1.8 per cent increase for the day. Since Macron called the snap election three weeks ago, traders have fretted about a far-right or far-left government implementing radical economic reforms. But a hung parliament would be unable to deviate from the status quo, which has become increasingly pro-business during Macron’s tenure. The uncertainty is still having an effect: even after Monday’s rally, French stocks remained 3.5 per cent down since the election was announced.
