Paris Stocks, Euro Fall On France Budget Standoff

Paris stocks and the euro fell Monday as a budget standoff in France fuelled concern about the eurozone's second-biggest economy

London, (UrduPoint / Pakistan Point News - 2nd Dec, 2024) Paris stocks and the euro fell Monday as a budget standoff in France fuelled concern about the eurozone's second-biggest economy.

Positive data from China helped boost equity markets elsewhere, with Germany's DAX index hitting a record above 19,700 points.

Oil prices jumped on hopes of higher Chinese demand.

That followed a strong lead from Asian markets and the United States, where the Dow and S&P 500 both ended at record highs in a holiday-shortened session Friday.

The euro sat near 14-month lows as opposition to France's belt-tightening draft budget threatens to topple the government.

Prime Minister Michel Barnier faces the risk of being deposed by a hostile National Assembly as his government presents a social security financing plan Monday that has the opposition up in arms.

Lacking a majority, Barnier could use executive powers to force through the legislation.

Such a move would likely expose him to a no-confidence vote within days, with the left wing and the far-right National Rally of Marine Le Pen willing to back that motion bringing down the government.

Le Pen "has the power to destroy Barnier and his mission to get France on a sustainable fiscal track", said Kathleen Brooks, research director at traders XTB.

Paris was weighed down also by Stellantis, the multi-brand auto giant, whose shares slid more than seven percent after chief executive Carlos Tavares abruptly resigned.

Asian traders began the month on the front foot after a rollercoaster ride since Donald Trump's re-election warning that he would hit China, Canada and Mexico with hefty tariffs on his first day in office as US president.

Hong Kong and Shanghai were among the best performers after data showed that Chinese manufacturing activity expanded at a faster clip than expected in November.

The purchasing managers index figures provided some hope that the world's number-two economy was turning a corner after a long-running slowdown, with analysts pointing to a raft of support measures unveiled at the end of September.

"The big unknown is whether the stimulus efforts will have a long-lasting effect or just a short-term boost," said Dan Coatsworth, investment analyst at AJ Bell.

Tokyo rose and the yen held recent gains at around 150 per dollar on increasing bets of another Bank of Japan interest-rate increase after last week's forecast-topping Tokyo inflation report.

BoJ Governor Kazuo Ueda said in an interview with the Nikkei published Sunday that increases were "nearing in the sense that economic data are on track".

- Key figures around 1050 GMT -

London - FTSE 100: FLAT at 8,286.86 points

Paris - CAC 40: DOWN 0.5 percent at 7,199.79

Frankfurt - DAX: UP 0.4 percent at 19,711.63

Tokyo - Nikkei 225: UP 0.8 percent at 38,513.02 (close)

Hong Kong - Hang Seng Index: UP 0.7 percent at 19,550.29 (close)

Shanghai - Composite: UP 1.1 percent at 3,363.98 (close)

New York - Dow: UP 0.4 percent at 44,910.65 (close)

Euro/dollar: DOWN at $1.0517 from $1.0580

Pound/dollar: DOWN at $1.2706 from $1.2739

Dollar/yen: UP at 150.30 yen from 149.60 yen on Friday

Euro/pound: DOWN at 82.80 from 83.04 pence

Brent North Sea Crude: UP 0.9 percent at $72.50 per barrel

West Texas Intermediate: UP 0.9 percent at $68.61 per barrel