French banks, energy, highway stocks plunge after Macron calls elections
Adds Voltalia shares in paragraph 7, comment on renewable energy stocks in paragraphs 9-10
June 10 (Reuters) -Shares in French banks, tollroad operators and renewable energy firms fell sharply on Monday, after French President Emmanuel Macron called surprise snap elections in response to his camp's defeat in EU elections.
Shares in BNP Paribas BNPP.PA, France's biggest bank, fell by close to 8% at the opening and was trading 5.3% lower at 1420 GMT, while shares in French lenders Credit Agricole CAGR.PA and Societe Generale SOGN.PA also suffered heavy losses.
The companies were among the biggest fallers on the pan-European STOXX 600 .STOXX index, alongside French highway operators Eiffage FOUG.PA and Vinci SGEF.PA, which also traded around 5% lower.
Macron's unexpected decision could hand major political power to the far-right after years on the sidelines, and put Marine Le Pen's National Rally (RN) party in charge of the domestic agenda, including economic policy.
Among policies put forward by the party, the RN has proposed higher public spending, despite already significant levels of French debt, threatening to further raise funding costs at French banks.
The RN has also proposed to nationalise French motorways to reduce road tolls by 15%.
French gas and electricity firm Engie ENGIE.PA also fell 4.5%, heading for its biggest intraday decline in over a year, while smaller renewable energy specialist Voltalia VLTSA.PA was down 6.5%.
France's blue-chip index CAC 40 .FCHI dropped 1.6%.
"The National Rally's programme on renewable energies is characterized by strong opposition, particularly on wind and solar energy," said Pierre-Alexandre Ramondenc, utilities and renewables analyst at Alphavalue.
The RN plans to dismantle existing wind farms and has long opposed the construction of new installations in favour of an almost exclusive focus on nuclear energy, he added.
Despite investor concerns, industry questioned whether the RN would proceed with its stated policies. Highways are a major contributor to state finances, said a source close to ASFA, the association of French highway companies.
"The concessions are tax collectors and pay half of their revenue to the State. Calling them into question would be a dangerous signal for France's rating," said the person, declining to be identified on political matters.
Reporting by Michal Aleksandrowicz in Gdansk and Gilles Guillaume, Benjamin Mallet and Mathieu Rosemain in Paris; editing by Tassilo Hummel and David Evans
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
