UK now has Europe's biggest stock market as France hit by political uncertainty

The UK has overtaken France as the home of Europe's biggest stock market

The UK has overtaken France to become Europe's largest stock market, as political uncertainty has led to billions of euros being wiped off Paris's leading index in just a few days.

France's stock market was narrowly edged out of the top spot, having claimed the title 18 months prior. Data compiled by Bloomberg reveals that stocks in France are now collectively valued at approximately $3.13trillion (£2.47trillion), slightly trailing behind the UK's collective worth of $3.18trillion (£2.51trillion).

Paris's premier index, the CAC 40, lost over 6% of its value last week, marking one of the worst weeks of trading in more than two decades. The index includes major banks such as BNP Paribas and Societe Generale, as well as consumer goods giants LVMH and Pernod Ricard.

Analysts at Deutsche Bank noted that the sell-off represented its largest weekly decline since March 2022 and, barring the early Covid period, "you would have to go back to the aftermath of 9/11 in 2001 to see such extremes". It added: "In turn, this more than wiped out all its gains year-to-date, leaving the index down 0.53% on the year."

Intense political squabbling among French parties has raised concerns about the country's future direction with snap parliamentary elections due at the end of the month potentially resulting in President Emmanuel Macron being ousted. Deutsche Bank's analysts forewarned: "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,".

However, things are not looking bright for President Macron. Deutsche Bank added: "The "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."

While France is shrouded in election uncertainties, London's FTSE 100 has been having an enthralling 2024, hitting new record-breaking highs thanks to reinforced investor assurance. In contrast to France, analysts feel that the UK seems to be facing fewer doubts about its approaching General Election, calming the financial markets considerably.

The latest opinion polls are consistently showing Sir Keir Starmer's Labour Party outperforming, leaving Prime Minister Rishi Sunak's Conservatives trailing behind. Talking about the market patterns, Susannah Streeter, who head Money and Markets for Hargreaves Lansdown, mentioned: "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 has announced its target saying: "Labour says it's focused on stimulating long-term growth to revive the sluggish economy."