PARIS (Reuters) – The main European stock markets are in the red on Monday morning, mainly in France, in a context of political uncertainties linked to the results of the European elections marked by the breakthrough of far-right movements and the choice of a dissolution of the National Assembly in France.

In Paris, the CAC 40 dropped 1.82% to 7,856.53 points around 07:30 GMT. In London, the FTSE 100 lost 0.7% and in Frankfurt, the Dax fell by 0.77%.

The EuroStoxx 50 index fell by 1.15%, the FTSEurofirst 300 by 0.77% and the Stoxx 600 by 0.62%.

Futures contracts on Wall Street predict a drop of 0.27% for the Dow Jones, 0.19% for the Standard & Poor’s 500 and 0.17% for the Nasdaq after a session in the red on Friday linked to the robustness of monthly US employment figures.

Nervousness dominates in Europe as Eurosceptic nationalist parties made a clear breakthrough in the European legislative elections which ended on Sunday. In France, this led Emmanuel Macron to announce, to everyone’s surprise, a dissolution of the National Assembly and the holding of new legislative elections on June 30 and July 7.

On the foreign exchange market, the euro fell to a one-month low against the dollar, at 1.076 dollars (-0.37%), while in bonds, the yield on the ten-year OAT is advancing by 5.6 basis points, to 3.1867%. The yield difference (spread) between the German Bund and the French ten-year OAT stands at 54.21 basis points, an increase of almost six points.

In Italy, the ten-year construction yield reached its highest since December, at 4.038%, an increase of eight basis points.

On the equity market, all major compartments of the Stoxx 600 are in the red, reflecting investors’ questions about the risks linked to the future political direction of the European Union. The consumption cycle (-1.27%) and the banking sector (-0.86%) are particularly attacked, notably in Paris Société Générale (-4.76%) and BNP Paribas (-4.26%).

(Written by Claude Chendjou, edited by Blandine Hénault)

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