The French stock market is in decline as far as big investors are concerned, according to the latest global fund managers survey from the Bank of America, due to the snap poll called by President Macron on June 10.
The survey showed that big global investors have retreated from France and are now more likely to be underweight in French shares than in any other European shares over the next 12 months.
This marks an enormous turnaround in confidence because the May survey showed France as the most popular European market and the top choice of major global investors.
Investors have now shifted to pro-defensive stocks and sectors, increasing their enthusiasm for the US, where they remain heavily invested and want to invest more.
The views were gathered from June 7 to June 13, encompassing most of last week’s drop when France’s CAC 40 Index fell the most in over two years, wiping out $US258 billion in market capitalization.
The survey was conducted while the European election results were being announced and during President Macron’s shock poll call, prompting a dramatic switch in investor strategy.
“France has turned into investors’ most unloved European equity market,” BofA strategists, including Andreas Bruckner, said on Tuesday.
Last week’s losses erased all of the CAC 40 benchmark’s gains for 2024 — even though it was reaching record highs only a month ago — and pushed France below the UK as the region’s largest stock market by value.
Investors fear that Macron’s centrist, pro-business Renaissance party will lose further ground in Parliament in a two-round vote scheduled for June 30 and July 7 to the extreme and far-right groups.
The CAC 40 rebounded on Monday as traders weighed assurances from far-right leader Marine Le Pen that she would work with Macron should she prevail in the elections.
The index was up 2% early Tuesday but lost more than half that gain to end up 0.7%.