London has regained its slot as the top stock exchange in Europe after the value of shares in Paris tumbled following President Macron’s shock election call.
Stocks in France are now collectively worth US$3.13 trillion (£2.47 trillion) compared to US$3.18 trillion (£2.51 trillion), Bloomberg has estimated.
Banks especially have been hard bit by the prospect of a right-wing victory in the poll, the possibility of which has risen after Marie Le Pen’s National Rally party made big gains in recent European Parliament elections.
BNP Paribas and Credit Agricole slumped by more than 10% as each is said to be a major holder of French bonds that took a beating following Macron’s decision.
Credit ratings agency Moody's warned President Emmanuel Macron's snap election could lead to a downgrade for the French government.
France's government was warned by Moody's that "potential political instability is a credit risk", especially in a country where the “debt burden is the highest among similarly rated peers”.
Should Macron's party lose control of parliament to the French National Assembly economists have expressed concerns that the government will significantly increase spending.
This would add to the current deficit faced by the French parliament, which at the end of 2023 stood at 110.6% of GDP.
Moody's believes that if National Rally seize power spending could rise to 115% of GDP within the next three years, which would leave the country "more susceptible to a rising cost of funding."
London’s FTSE 100 too has retreated after hitting record highs earlier in the year but is still well up on a year ago while the CAC 40 index in Paris is now only about 3% ahead.