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UK overtakes France as home of Europe’s biggest stock market

The UK has overtaken France as the home of Europe’s biggest stock market (Yui Mok/PA)
The UK has overtaken France as the home of Europe’s biggest stock market (Yui Mok/PA)

The UK has overtaken France as the home of Europe’s biggest stock market, as political divisions have resulted in billions of euros being wiped off Paris’s top index in a matter of days.

The French stock market was knocked off the top spot by a narrow margin, after taking the title 18 months ago.

According to data compiled by Bloomberg, stocks in the country are now collectively worth about 3.13 trillion US dollars (£2.47 trillion), fractionally behind the UK’s collective 3.18 trillion US dollars (£2.51 trillion).

Paris’s top index, the CAC 40, shed more than 6% of its value last week in one of the worst weeks of trading for more than two decades.

The index counts the likes of banks BNP Paribas and Societe Generale and consumer goods giants LVMH and Pernod Ricard among the companies listed.

A group of analysts at Deutsche Bank said the sell-off was its largest weekly decline since March 2022 and, other than during the early Covid period, “you would have to go back to the aftermath of 9/11 in 2001 to see such extremes”.

“In turn, this more than wiped out all its gains year-to-date, leaving the index down 0.53% on the year,” they said.

Keir Starmer visit to London Stock Exchange Group
Labour leader Sir Keir Starmer and shadow chancellor Rachel Reeves during a visit to the London Stock Exchange Group (Stefan Rousseau/PA)

Intense political in-fighting among parties in France has stoked concerns about what the country’s future holds, with it facing snap parliamentary elections at the end of the month which could see President Emmanuel Macron pushed out.

“Suffice to say that this uncertainty will be with us until at least the second round of the election on July 7 and likely beyond,” Deutsche Bank’s analysts predicted.

“The polls haven’t narrowed in Macron’s favour in the first week of the campaign with the far-right and left outpacing the president’s centrist party.”

Meanwhile, London’s FTSE 100 has had a strong 2024 so far, hitting new all-time highs thanks to improved investor confidence.

Some analysts said that, in contrast to France, the UK is facing less uncertainty over its forthcoming General Election, which has helped calm the financial markets.

Opinion polls continue to show Sir Keir Starmer’s Labour Party taking the lead and Prime Minister Rishi Sunak’s Conservatives suffering a defeat.

Susannah Streeter, head of money and markets for Hargreaves Lansdown, said: “In the UK, comments by shadow chancellor Rachel Reeves will also buoy hopes that there could be slightly closer trade ties between the UK and the EU under a Labour administration and less of a focus on regulatory divergence.

“Labour says it’s focused on stimulating long-term growth to revive the sluggish economy.”