The French stock market showed little reaction to the political turmoil following the collapse of Prime Minister Michel Barnier’s government. On Thursday, the Paris Bourse rose by 0.65%, and the CAC 40 index increased by 0.66% the day before.
Despite the government’s downfall, the euro remained largely unchanged. The CAC 40 opened with a slight gain after Barnier’s government fell due to a no-confidence vote.
Modest Market Response to Government Collapse
Barnier, the shortest-serving prime minister in France’s modern Republic, was ousted by the National Assembly. The collapse followed a contentious budget that lacked support from both far-right and left-wing politicians.
Markets appeared to accept the news with modest reactions. French bonds held steady, with the 10-year bond yield at 2.886%. Earlier in the week, concerns over France’s political direction led to higher borrowing costs, surpassing those of Greece for the first time.
Shares in major French banks rose, with BNP Paribas and Credit Agricole up by around 2%, while Societe Generale gained nearly 3%.