European Shares Extend Losses Due To Political Uncertainty

(RTTNews) - European stocks fell on Friday to extend losses from the previous session as election campaigns in the U.K. and France continue.

Political uncertainty in France weighed after the country's finance chief warned that a new left-wing coalition coming to power in France would lead to the country's exit from the European Union.

Elsewhere, Nigel Farage's Reform UK has surpassed Prime Minister Rishi Sunak's Conservatives in a YouGov poll.

The poll for the Times newspaper puts Reform UK at 19 percent, up from 17 percent previously, and the Conservative Party unchanged at 18 percent in voting intention.

The pan European STOXX 600 dropped 0.4 percent to 514.25 after falling 1.3 percent on Thursday.

The German DAX shed 0.6 percent, France's CAC 40 tumbled 1.7 percent and the U.K.'s FTSE 100 was down 0.2 percent.

Regional banks suffered heavy losses, with French lenders BNP Paribas, Credit Agricole and Societe Generale plummeting 3-5 percent as the risk premium on French bonds hit a four-year high on concerns about the political situation in the country.

France's finance minister has 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.

French retail company Casino Group slumped 8 percent after an announcement that it has entered into exclusive negotiations with Auchan Retail France and Rocca regarding a sale of its Corsican subsidiary Codim 2.

Crest Nicholson shares jumped 8.4 percent in London. The embattled housebuilder has rebuffed a second all-share takeover approach from its larger rival Bellway.

Tesco rallied 2.3 percent after reporting a "robust" surge in grocery purchases by U.K. shoppers in the most recent quarter.

In economic releases, 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.

Britons' short-term inflation expectations softened in May, the quarterly Inflation Attitudes Survey conducted by Ipsos on behalf of the Bank of England showed.

The one-year ahead inflation expectations fell to 2.6 percent from 2.8 percent in February. Respondents assessed the current inflation at 5.5 percent compared to 6.1 percent in the previous survey period.