(BFM Stock Exchange) – The Parisian index finally finished on a drop of 1.36% after losing up to 2.1% at the lowest of the day. The resignation of the Prime Minister nevertheless amplified the political uncertainty that the country faces.

The Paris Stock Exchange saves furniture. Its flagship index, CAC 40, finally finished down 1.36% to 7,971.78 points, straightening in the afternoon after declining 2.1% at the lowest of the session.

The Prime Minister’s surprise resignation Sébastien Lecornu, however, threw a cold. The tenant of Matignon took note of the bad reception of his government, announced Sunday evening, with the various parties.

The Head of Government judged that the conditions were not met to govern, castigating in passing, the “partisan appetites” which led to his fall. “You even have to go back to the III Republic to find such an ephemeral government,” notes Antoine Fraysse-Soulier d’Etoro.

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Budget uncertainties

“As with his predecessor (François Bayrou who had not survived a vote of trust in early September, NDKR), the ‘political shock’ revives the French sovereign risk and regulatory and budgetary uncertainty”, adds the market specialist. The latter, however, believes that the good resistance of Wall Street, where the S&P 500 takes 0.3% shortly before the European fence, could allow the CAC 40 to limit the breakage, this Monday.

The large thermometer of stress on French debt, the gap between the rates of bonds at 10 French and German years (the “Spread”) has also reflected a little. It reaches 85 base points (0.85 percentage points) after exceeding 88 base points in the morning. The euro also slowed down its withdrawal. The motto of the euro zone loses 0.2% then against the dollar, at 1.1711 dollars, while it abandoned 0.7% in the morning.

Nevertheless, the political situation in France faces a significant risk of blocking. Maxime Darmet, by Allianz Trade, table on the constitution of a “technical government” which would pass a “special law” for, roughly, renew the budget of 2025 identically.

“The probability of anticipated legislative elections is also increasing. In such a scenario, the probable additional tension on the spreats as well as the new increase in uncertainty would put pressure growth and, ultimately, on the public deficit due to the drop in collected tax revenue and an increase in the cost of financing the debt,” he explains.

Banks pitch

Several sectors have suffered on the Paris Stock Exchange. Whose banks, which are on the front line of this risk aversion movement. Société Générale lost 4.2%, BNP Paribas 3.2%and Crédit Agricole SA 3.4%.

Thales fell 3.2%. The political hazard in France could delay the adoption of a finance law and therefore of the defense budget for 2026. This can constitute a source of uncertainty for the market.

On the CAC 40, Stellantis (+3.5%), ArcelorMittal (+1.6%) Totalnergies (+0.5%) and Pernod Ricard (+0.5%), escape this lower movement.

Getlink (-2.7%) was also penalized by a lowering of recommendation to “neutral” against “buy”.

Excluding the star index, SEB unscrewed by 21.4% after a new warning on its results, the specialist in small appliances citing a low demand for its products.

On the oil side, it is growing while the organization of oil exporting countries and its allies (OPEC +) have decided to increase their production but at a less sustained pace than anticipated by the market. The December contract on the Brent de Mer du Nord takes 1.5% at 61.80 a barrel while that of November on the WTI listed in New York gained 1.5% at 61.77 Dollars per barrel.