Frankfurt Stock Exchange - Dax ends the day with losses.
The week kicked off with a sliding stock market in Paris, where the CAC 40 index dropped to its weakest point since February. This index faced the severest fall among major European exchanges, declining by 1.4%. French government bonds also experienced a downturn, reaching their lowest point since November 2023.
Amidst the chaos, President Emmanuel Macron made a daring move by calling for another election for the National Assembly, his party recently suffering an overwhelming defeat during the European elections. His aim was to establish clearer political alignments and potentially boost his parliamentary majority.
Analyst Jim Reid from Deutsche Bank termed it a 'bold bet' as Macron could also hope that the far-right National Rally (RN), led by Marine Le Pen, might lose some charm prior to the 2027 presidential contest. He also highlighted the possible consequences should the RN win the interior and economic policy after the parliamentary elections: "A drumroll in Paris". If the right-wing populists took over, they could prove to be a source of turmoil on the financial markets. As they've promised, these political forces might lower the French retirement age.
In Germany, the stock market felt the heat due to political instability. The disappointing performance of the „traffic light“ coalition led to a buzz. The Greens, who back Germany's energy transition, endured severe losses in the European election.
The share values of Nordex, a wind turbine manufacturer, and SMA Solar, a solar expert, slid by 2.6% and 1.9% respectively. RWE, a major player in Germany's Dax, also struggled, with a -1.7% burden.
There was minimal activity in the corporate sector on Monday morning. Deutsche Bank's buy recommendation pushed Cancom's stock up by a powerful 5.5%.
Porsche AG concluded trading at €1.78, a 2.4% dip attributed to a cut in dividends amounting to €2.31 per share.
The EuroStoxx 50, a key index for the eurozone, dipped by 0.69% to 5016.48 points at the beginning of the week. The London Stock Exchange experienced only moderate losses.
Additionally, the euro struggled during the European elections and closed at $1.0742 by nightfall. The ECB had set its reference rate at $1.0756 midday.
Lastly, the yield on 10-year German government bonds rose from 2.64% on Friday to 2.70%. The bond index Rex tumbled by 0.31% to 123.44 points. The Bund future suffered a 0.40% loss, reaching 129.67 points by nighttime.
Want to know more about it? Subscribe to my newsletter.
Read also:
The CAC 40 in Paris mirrored the Frankfurt Stock Exchange, both ending the day with losses. The tumble of the CAC 40 was particularly noticeable among major European exchanges, with a decline of 1.4%. German stocks also felt the impact, with the DAX seeing losses due to political instability. Marine Le Pen's National Rally, a contender in France's political landscape, could potentially affect stock markets if they gain power in future elections. Emmanuel Macron, in a bid to strengthen his political stance, proposed another election for the National Assembly. In Frankfurt am Main, Deutsche Bank issued a buy recommendation for Cancom's stock, resulting in a significant increase. Despite these fluctuations, the MDAX, a German stock market index, managed to rise by 0.25% on the day.
