Earthquake in Europe! The French stock market suddenly plummeted, and European stocks fell collectively!

Securities Times E Company

2024-06-10 17:17Published on the official account of "Company E" under Guangdong Securities Times

Dragon Boat Festival, peripheral news is coming.

European stocks fell across the board

Today's European market fell across the board at the open.

The French stock market fell the hardest, with France's CAC 40 index opening with a gap of more than 2%.

The euro also fell

Gold and silver rose slightly.

However, in today's Asia-Pacific market, the Nikkei 225 index closed up 0.92% at 39,038.16 points.

On the news side, the statistical results released by the Japanese Cabinet Office on the 10th showed that Japan's real gross domestic product (GDP) fell by 0.5% month-on-month in the first quarter of this year, and the decline was 1.8% on an annualized basis, which was negative again after turning positive in the fourth quarter of last year.

Macron announced the dissolution of the National Assembly

The main reason for the volatility of the European market, especially the French market, is the impact of the European Parliament elections.

The European Parliament election vote came to an end on the evening of the 9th. Preliminary statistics show that the centrist Baath Europe group and the Greens and EFA groups have seen a significant reduction in seats, with the European Parliament leaning significantly to the right.

Xinhua News Agency reported that because the support of the French ruling party in the European Parliament elections that ended on the 9th was much lower than that of the far-right party, French President Macron announced the dissolution of the National Assembly and the holding of new National Assembly elections on the evening of the 9th.

The European Parliament elections every five years will be held from the 6th to the 9th, and most EU member states, including France, will vote on the 9th, and French voters will vote for 81 MEPs representing France. According to the latest exit poll results released by a number of French media on the evening of the 9th, the far-right party National Alliance won 31.7% of the votes, ranking first among French political parties; The ruling Ba'ath Party came in second with 14.9 percent of the vote.

In a televised speech that night, Macron said that the results of the European Parliament elections "are not a good result for the parties defending Europe." In accordance with the powers conferred on him by the Constitution, he decided to leave the future of the National Assembly to the voters to decide by voting, and to that end it was decided to dissolve the National Assembly and hold two rounds of voting in the National Assembly elections on 30 June and 7 July.

From June 6 to 9, nearly 400 million voters in EU member states will vote for 720 parliamentarians. This election is being held against the backdrop of Brexit, the ongoing crisis in Ukraine, and the rise of right-wing parties in Europe.

The ECB cut interest rates for the first time in five years

In addition, on June 6, local time, the European Central Bank decided to cut the three key interest rates in the euro area by 25 basis points, and the adjusted main refinancing rate, marginal lending rate and deposit facility interest rate in the euro area will be 4.25%, 4.5% and 3.75% respectively, and the interest rate level will take effect on the 12th of this month. This is the first time the ECB has cut interest rates since September 2019.

The ECB said that based on the latest assessment of the inflation outlook, underlying inflation dynamics and the strength of monetary policy transmission, it is appropriate to moderately ease monetary policy restrictions now after keeping interest rates stable for nine months. Since September 2023, inflation in the eurozone has fallen by more than 2.5 percentage points, and inflation expectations have improved significantly.

Some analysts believe that the European Central Bank's interest rate cut may mark the beginning of a new round of global monetary easing cycle, which will help open up the external constraints of domestic monetary policy.

The ECB's rate cut follows 25 basis point cuts in Switzerland, Sweden and Canada on 21 March, 8 May and 5 June, respectively.

How to go for A-shares?

Haitong Securities' 2024 mid-term outlook for the stock market said:

1. At the beginning of February this year, A-shares may have bottomed out, and the rise since the beginning of February is the first wave of rebound at the bottom, and the current market is in the stage of accumulation of fundamental verification.

2. Looking forward to the second half of the year, the capital and fundamentals may usher in positive changes, and the market center is expected to reach a new level.

3. Structurally, the white horse with better fundamentals or the medium-term main line, focusing on mid-to-high-end manufacturing and technology fields.

The content is synthesized from Xinhua News Agency and Beijing News

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