The Paris stock exchange opened slightly higher on Tuesday, showing resilience despite fresh political turbulence following the collapse of Prime Minister Francois Bayrou’s government, which lost a confidence vote in parliament the previous day.
At the opening bell, the CAC 40 index France’s benchmark for blue-chip stocks rose 0.2%, signaling cautious investor optimism. Meanwhile, Germany’s DAX slipped 0.1%, and London’s FTSE 100 gained 0.1% in early trading.
Bayrou is expected to formally tender his resignation to President Emmanuel Macron later today, triggering a leadership search as the French president attempts to prevent a deeper political crisis in the eurozone’s second-largest economy.
“With the defeat having been widely anticipated, the market reaction was muted,” said Jim Reid, head of macro research at Deutsche Bank.
The measured response from investors suggests that markets had already priced in the political instability, with little immediate panic despite the fall of the government.
“The calm reaction suggests that a lot of the bad news is already priced into the French index,” said Kathleen Brooks, research director at the XTB trading platform. “It may take a serious deterioration in the situation from here to spook the French stock market.”
France’s political uncertainty comes at a time when European markets are already grappling with concerns over inflation, interest rates, and slower global growth. However, for now, investors appear to be betting that institutional continuity and Macron’s next move will maintain stability.
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