Value of Euronext Paris stocks falls by about $258bn in week after Macron’s announcement of snap elections

Paris has lost its spot as Europe’s largest equity market to London, as investors reacted to political turmoil in France in the week since Emmanuel Macron called snap elections.

Stocks listed on Euronext Paris were collectively worth about $3.13tn after about $258bn was knocked off the market capitalisation of French companies last week, putting it behind the London Stock Exchange’s $3.18tn (£2.51tn), according to data compiled by Bloomberg. Separate data from Refinitiv, a subsidiary of the London Stock Exchange Group, also suggested the market value of UK-listed companies was bigger.

Rolling coverage of the latest economic and financial news

• China’s glut of idle property causes headache for the government

China has retaliated against Europe’s new curbs on its electric cars, by opening an anti-dumping investigation into imported pork and its by-products from the European Union.

China is the EU’s biggest overseas market for pork, which was worth over $1.8bn last year according to Bloomberg, led by shipments from Spain, Denmark and the Netherlands.

CAC 40 index has its worst week since March 2022 after Macron’s decision to call snap elections

France’s stock market is heading for its biggest weekly fall in more than two years, amid fears that the country’s far-right party could win the upcoming parliamentary elections.

French bonds were also hammered this week, as analysts warned of the risk of a Liz Truss-style market panic following Emmanuel Macron’s shock decision last Sunday to call snap national assembly elections.

Rolling coverage of the latest economic and financial news

• Tesla shareholders approve CEO Elon Musk’s $45bn pay package

Shares in Tesco have jumped 1.9% this morning, to the top of the FTSE 100 leaderboard.

Traders seem pleased with its Q1 results this morning, in which the company reiterates its guidance for the full year. That includes making retail adjusted operating profit of at least £2.8bn this year, slightly higher than the £2.76bn in 2023/24.

Tesco has reiterated its guidance for flat profits, but we see this as somewhat conservative. Management is doing well, while private equity owned supermarkets – Asda and Morrisons – struggle as priorities are very different.

Tesco has a good opportunity to take advantage of these trends especially as inflation continues to ease and disposable incomes recover.”

Rolling coverage of the latest economic and financial news

• Housebuilder Crest Nicholson slides into loss amid UK property market woes
• Should Tesla pay Elon Musk $45bn? The shareholders will decide

Shares in Tesla are rallying in pre-market trading, after Elon Musk posted that shareholders are voting in favour of his $56bn pay award.

They’re up around 6.6% at $189, which would recover some of their 28% fall so far this year (they began January near $250).

“A crunch vote on Elon Musk’s pay at Tesla’s AGM later could either provide a further catalyst for the share price to stall or remove an overhang and allow the shares to power up once more.

“Musk, no stranger to controversy, has gone on record as saying his blockbuster pay package will pass by a wide margin but there has been considerable disquiet about its size relative to the recent performance of Tesla. He also says the move to incorporate the business in Texas, linked to the renumeration issue, will get through.

Latest UK labour market report shows signs of cooling, as jobless rate hits highest since 2021

• Five pieces of economic news that could affect UK election result

The next government will have to tackle the problem of falling employment, rather than falling inflation, says the Resolution Foundation thinktank.

Resolution point out that the UK unemployment rate has increased for four months in a row – from 3.8% in the last quarter of 2023, to 4.4% in the three months to April 2024 – an increase of 190,000 people out of work.

“The labour market has continued to cool in early 2024, with both unemployment and inactivity up. Worryingly, the UK employment is closer to its mid-pandemic lows, than its pre-pandemic highs.

“Turning around this poor performance, and kickstarting the kind of jobs growth Britain experienced in the 2010s will be a key task for the next government.

Win would benefit banks, builders and supermarkets, say analysts, showing appeal of ‘centrist platform’ for City

• UK general election live – latest updates

A Labour election victory will be a “net positive” for financial markets, strategists at the US bank JP Morgan have said, in an analysis that underlines the appeal of Keir Starmer’s “centrist platform” to the City of London.

A majority for Labour would benefit banks, builders and supermarkets, analysts led by JP Morgan’s head of global equity strategy, Mislav Matejka, wrote in a note to clients published on Monday. The US investment bank said Labour’s policies would be “modestly pro-growth, but crucially with a likely cautious fiscal approach”.

Investors are rattled after far right parties make gains in European elections, while analysts at JP Morgan say a Labour win would support UK stocks

The euro continues to bob around a one-month low this morning, at $1.0763 against the US dollar:

French banks are being hit by the political uncertainty created by Emmanuel Macron’s snap election.

Investors are assessing Macron’s gamble in attempting to reassert his authority after voters shifted en masse to the Far-right during the EU elections, in both France and Germany. The euro has dropped sharply against the dollar, to $1.074, the lowest in a month amid the surprise turn of events.