CAC 40 Extends Losses On Political Uncertainty, Inflation Concerns
(RTTNews) - French stocks tumbled on Friday to extend losses from the previous session as investors fretted about the political situation in the country.
The risk premium on French bonds hit a four-year high after France's finance minister warned that the country could plunge into a debt crisis similar to one sparked in the U.K. two years ago if far-right leader Marine Le Pen were to win legislative elections slated for the end of the month.
Ratings agency S&P Global, which recently downgraded the country, said policies advocated by the party could have implications for the credit rating.
Meanwhile, France's consumer price inflation accelerated in May on higher energy and food prices, final data from the statistical office INSEE showed.
The consumer price index climbed 2.3 percent on a yearly basis in May, faster than the 2.2 percent increase seen in April. The rate for May was revised up from 2.2 percent.
The slight increase in inflation resulted from higher prices of energy and food. Energy prices grew at a faster pace of 5.7 percent due to base effect.
EU-harmonized inflation rose less than initially estimated to 2.6 percent from 2.4 percent in the prior month.
The benchmark CAC 40 was down 109 points, or 1.4 percent, at 7,598 after losing 2 percent on Thursday.
Banks led losses, with BNP Paribas, Credit Agricole and Societe Generale tumbling 3-4 percent.
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