EUROPEAN shares gave up early gains to close lower on Friday as a drop in shares of beauty giant L’Oreal weighed, while the benchmark index clocked weekly, monthly and quarterly declines on French political uncertainties.
The pan-European Stoxx 600 closed 0.2 per cent lower, extending losses to the fourth straight session.
The personal and household goods sector shed 1 per cent, dragged by a 3 per cent fall in French beauty giant L’Oreal after its CEO gave a lower market growth forecast during a Fireside Chat hosted by JPMorgan.
The benchmark Stoxx 600 recorded its first quarterly loss in three, along with a monthly and weekly decline, amid political uncertainties in France following President Emmanuel Macron’s call for a snap election earlier this month.
“It’s a pretty lacklustre end for a generally lacklustre quarter … markets are very nervous about Macron’s gamble,” said Steve Sosnick, chief market analyst at Interactive Brokers.
France’s benchmark CAC 40 index lost 0.7 per cent, ending 8.8 per cent lower for the quarter, underperforming the region’s bourses. The risk premium on French government bonds hit its highest since 2012.
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Meanwhile, an opinion poll published in newspaper Les Echos said far-right party National Rally (NR) further rose in its forecast and may reach as much as 37 per cent of the popular vote, two days before the first voting round in the French parliamentary elections.
“There is a risk of a wider European downturn stemming from France, depending on the election outcomes,” said James Reilly, markets economist at Capital Economics.
Technology stocks rose 0.4 per cent, tracking record-setting gains on the tech-heavy Nasdaq, as a softer inflation reading firmed bets of a September rate cut from the Federal Reserve.
In the continent, French consumer prices rose 2.5 per cent year-on-year in June, in line with expectations, as per preliminary data, while Spain’s EU harmonised inflation rate fell to 3.5 per cent in the 12 months through June.
Among other stocks, Nokia added 1.5 per cent after the Finnish firm agreed to buy Infinera Corp in a deal with an enterprise value of US$2.3 billion.
Britain’s largest sportswear retailer JD Sports fell more than 5.4 per cent after US peer Nike forecast a surprise drop in 2025 revenue, while German peer Puma also lost 2.5 per cent.
Air France-KLM dropped 4.1 per cent to a record low after Barclays cut the Franco-Dutch airline group to “equal-weight” from “overweight” on political uncertainty.
Finland’s Fortum shed 4.6 per cent after Goldman Sachs downgraded the utility to “sell” on limited share upside and weaker profit and investment outlooks. REUTERS
