France leads the European stock market

Europe’s most valuable stock market post now has a new owner, the French Stock Exchange, overtaking the UK Stock Exchange – according to Bloomberg data.

Some of the possible explanations for what happened are the devaluation of the British currency (the pound sterling), the growth in sales by French manufacturers of luxury goods and fears of recession in the United Kingdom.

That happened when Paris surpassed London, for the first time, since 2003, when the compilation of data began to be done by Bloomberg.

Bloomberg

The UK could slip into recession this year, according to expectations. What is also estimated is the crisis in the French economy. According to Bloomberg calculations, about $2.821 trillion is the combined value of British equities, trailing French ones, which are worth about $2.823 trillion.

Marking a major turning point, as in 2016 the London Stock Exchange held a $1.4 trillion lead over its rival Paris. It can be analyzed that the French economy has been improving over time. On the other hand, the UK is underperforming this year with mid-sized UK stocks, a fallout from the inflationary crisis, forcing owners and consumers alike to cut back on their spending.

FTSE

London’s FTSE 250 stock índice, made up of medium-sized British companies, has dropped nearly 17% over the last 12 months. The biggest falls on the UK stock market include pub chain Mitchells and Butlers (slumped by 37% in the value of its shares last year), gambling company 888 (lost 70%) and retailer Marks & Spencer (down 40%).

UK companies were also affected by the devaluation of their currency, as a result of the economic plans presented by former Prime Minister Liz Truss. This caused an increase in the cost of importing goods and raw materials.

The quotation of the euro suffered a fall against the dollar, but with a less accentuated rate than the pound. The recovery in Chinese demand favored the French stock market, boosting luxury goods manufacturers. Shares in LVMH, owner of the famous fashion brand Louis Vuitton, have seen a 22% growth in the last six months. Hermès achieved a 37% increase. China accounted for about 35% of global demand for luxury goods before the pandemic.

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