French stock markets experienced a significant decline on Wednesday, with banks enduring substantial losses as the risk premium for holding French debt soared to its highest point since 2012. This surge occurred amid fiscal and political instability, along with growing concerns regarding the future of the newly-formed government.
Banking giants such as BNP Paribas, Credit Agricole, and Societe Generale witnessed declines ranging from 2 to 3 percent. Additionally, the CAC 40 index, a key benchmark, fell by 69 points—equating to a 1 percent decrease—landing at 7,125, following a 0.9 percent drop the previous day.
On the economic data front, there was further discouragement as recent figures indicated heightened consumer pessimism about the country's overall economic prospects. According to the latest monthly survey from INSEE, France's national statistical office, consumer confidence deteriorated in November to its lowest point in five months.
Specifically, the consumer sentiment index declined to 90 in November from 93 in October, remaining well below its long-term average of 100. Notably, the index reflecting consumers' expectations of their financial situation fell sharply to -13.0 in November, down from -8.0 the prior month.
