Story Highlights
- French President Macron’s shock decision to call snap elections roils markets.
- CAC 40 plunges over 2% as selling spreads across Europe.
- Political turmoil in France fuels fears of prolonged market volatility.
The Paris stock exchange witnessed a dramatic sell-off on Monday, leading the European market rout as French President Emmanuel Macron’s unexpected decision to call snap elections sent shockwaves through the financial world.
Euro Takes a Hit
The euro also bore the brunt of the political uncertainty, plunging against the dollar to $1.0762 as investors grappled with the implications of President Macron’s move.
“The outcome of the European elections have caused a ruction in European politics,” remarked Kathleen Brooks, research director at XTB trading platform. “No one expected France to call parliamentary elections on the back of the EU elections, so the shock factor may weaken the euro and European stock markets at the start of the week.”
The Paris CAC 40 index bore the brunt of the selloff, plummeting more than two percent before trimming some losses. It was still down a substantial 1.8 percent at 7,854.84 points by around 0720 GMT.
Ripple Effect Across Europe
The reverberations were felt across the continent, with the Frankfurt DAX shedding 0.7 percent to 18,427.63, Milan down 0.8 percent to 34,375.90, and Amsterdam falling 0.5 percent to 919.33. The pan-European Stoxx 600 retreated by almost 0.7 percent to 520.11 points.
Even non-EU Britain felt the chill, as the London FTSE 100 slipped 0.6 percent to 8,199.38, mirroring the gloom sweeping across European markets.
As the ramifications of Macron’s move continue to unfold, investors brace themselves for a period of heightened volatility, with the political landscape in France – and by extension, Europe – hanging in the balance.
