French stocks saw gains on Thursday amid efforts by President Emmanuel Macron to resolve the ongoing political turmoil in the country. The political arena witnessed a significant shift as Prime Minister Michel Barnier is anticipated to step down following a no-confidence vote concerning a budget altercation. His resignation marks him as the shortest-reigning prime minister in the contemporary period of France.
The nation is expected to experience an interim period without a governing body, potentially lasting several weeks or even months. During this time, President Macron is tasked with appointing a new prime minister who will undertake the responsibility of forming a new government.
Although the State budget and social security budget for 2025 may not go through a voting process, the existing constitution provides for special measures to prevent any governmental operations from halting, akin to a shutdown scenario observed in the United States.
The CAC 40 index showed positive momentum, climbing 42 points, or 0.6%, reaching 7,345, building on a 0.7% increase from the previous day.
Within the corporate sector, Safran SA, a manufacturer of aircraft equipment, experienced a decline of 5.2% in its stock value following the release of new financial targets. Meanwhile, financial institutions such as BNP Paribas, Credit Agricole, and Societe Generale saw increases of 2-3%, spurred by optimism that the government can circumvent a shutdown. In the energy sector, TotalEnergies rose by 1.5% after RBC revised its stock rating upwards.
