2024-12-06 00:27:56 :
(Bloomberg) — European stocks rose for a sixth straight session, the longest winning streak since May, as investors weighed the latest developments in France’s political turmoil.
London’s Stoxx Europe 600 index rose 0.2% at 3:13 pm, with travel and leisure stocks and banking stocks outperforming other stocks. France’s blue-chip CAC 40 index rose 0.3% after rising 0.7% earlier, with banks including BNP Paribas SA and Societe Generale SA remaining top performers.
Earlier this week, Prime Minister Michel Barnier used constitutional tools to push through parts of the budget without a vote in parliament. This has led to the far-right National Rally party and the left-wing League pushing for a motion of no confidence in the government.
National League leader Marine Le Pen told Bloomberg in an interview earlier today that France could overcome a government collapse and deliver a budget “within weeks” as long as the next prime minister is prepared to narrow the deficit more slowly.
Roberto Scholtes, head of strategy at wealth manager Singular Bank, said: “If a significant increase in corporate taxes ultimately fails to pass parliament, it will be good news for the battered French stock market.” “Banks, utilities and infrastructure companies are trading at unprecedented prices relative to their European peers, and once visibility increases, the gap will narrow.”
The yield premium between France’s 10-year government bonds and their safer German equivalents, a closely watched risk gauge, has also narrowed after recently hitting 90 basis points, the highest since 2012 level.
Political risks and worries about economic weakness have weighed on valuations for months, with European stocks looking more attractive compared with U.S. stocks. French stocks were particularly hard hit as the government was unable to agree on a 2025 budget.
“From yesterday to today, we saw a relatively limited reaction from the market,” said Marie Jacot, France chief executive of Edmond de Rothschild Asset Management. “We are starting to clearly see some good entry points into French equities.”
In other company news, Equinor ASA and Shell are to merge their UK offshore oil and gas assets to form a new company that will become the largest independent producer in the UK North Sea.
Elsewhere, Future Plc shares rose after full-year revenue met forecasts, while Aurubis AG also gained after reporting strong full-year figures. Meanwhile, Safran was one of the worst performers on European benchmarks after announcing a disappointing target.
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—With assistance from Farah Elbahrawy and Sagarika Jaisinghani.
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