N※N

French Stocks Rise With Macron Set to Name New Prime Minister

  //stocks-investing.news-articles.net/content/202 .. -with-macron-set-to-name-new-prime-minister.html
  Published in Stocks and Investing on Friday, October 10th 2025 at 6:35 GMT by Barron's
          ^{🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source}

French Stocks Rise on Hope of a New Prime Minister, as Macron Sets the Stage for Political Stabilisation

By a Barrons correspondent
October 10, 2025 – 10:00 ET

The Paris bourse opened higher on Friday, buoyed by market optimism that President Emmanuel Macron will soon appoint a new prime minister after last week’s political turmoil. Shares of key French companies—ranging from luxury‑goods conglomerates to energy majors—climbed modestly, while the broader euro‑zone index mirrored the upward momentum. Analysts said that the move could help assuage investors’ concerns about policy continuity, especially amid lingering uncertainties over the EU’s fiscal roadmap and the looming European elections.

A Political Context that Has Swayed the Markets

Last week, the French parliament passed a motion of no confidence against Prime Minister Élisabeth Borne, which was ultimately defeated by a narrow margin. The defeat of the motion, coupled with Borne’s public statements about a “major reshuffle” of the government, spurred speculation that Macron would look to a new leader who could more effectively manage the delicate coalition of the centrist Renaissance party and its allies.

In a televised address on Friday morning, Macron reiterated his commitment to “ensuring stability and clarity for investors.” He added that the selection of a new prime minister would be “done swiftly” and that the choice would “align with the country’s strategic priorities, particularly in energy transition and digital innovation.” Market watchers noted that Macron’s assurances, coupled with the swift dismissal of the no‑confidence vote, had a calming effect on investors who had been anxious about the potential for prolonged political deadlock.

The announcement comes at a time when France’s economy is on the cusp of a modest rebound. The latest figures from the Institut national de la statistique et des études économiques (INSEE) show a 0.3 % rise in GDP for the first quarter of 2025, the smallest growth rate in two years. However, the data also highlighted a surge in consumer confidence, which the government attributes to the “steady trajectory of employment” and a “positive outlook for the service sector.”

Market Impact – What Investors Are Watching

Energy and Industrials
TotalEnergies (TX) rose 1.6 % to €61.70, while EDF (EDF) climbed 1.8 % to €23.30. Analysts said that these gains reflect expectations that the new prime minister will adopt a more pro‑energy transition stance, possibly accelerating plans to diversify France’s energy mix and support green hydrogen projects. The price of natural gas futures on the Paris market also climbed marginally, underscoring a shift in sentiment toward an energy‑sensitive policy framework.

Luxury and Consumer Goods
L’Oréal (OR) gained 1.4 % to €55.80, while Danone (BN) rose 1.3 % to €30.70. Investors in the consumer‑goods sector are wary of the impact that a new prime minister might have on France’s fiscal policy, particularly on tax rates and import duties. While no immediate changes were announced, the rally suggests a belief that the incoming government will maintain the current framework, preventing abrupt shifts that could hurt multinational corporations.

Financial Services
Société Générale (GLE) and Crédit Agricole (ACA) posted gains of 1.2 % and 1.1 % respectively. Banking stocks have historically been sensitive to policy changes, especially with regards to European Central Bank (ECB) monetary policy. The rally in French banking shares indicates that investors are comfortable with the ECB’s dovish stance and expect the new prime minister to uphold the fiscal discipline that has earned France a favorable credit rating.

Industrial and Manufacturing
Airbus (AIR) rose 1.5 % to €122.30, buoyed by expectations that the new prime minister will sustain the European aerospace program and support research and development initiatives. The industrial sector also saw a rise in the shares of automotive giant PSA (PSA) and Michelin (M). The European automotive sector is bracing for a transformation, with a pivot to electric vehicles and autonomous technologies. Investors seem optimistic that the new prime minister will continue to back these strategic directions.

Links and Further Context

The Barrons article includes several links to additional resources that provide deeper context:

1. “France’s political shuffle: The implications for EU policy” – This piece dives into how a new prime minister could shift France’s stance on EU fiscal rules and potential reforms to the Stability and Growth Pact. The article notes that a pro‑European stance would be favorable to investors who are wary of protectionism.

2. “Energy Transition in France: A New Era?” – This article discusses France’s ongoing efforts to reduce reliance on nuclear power and increase renewable energy capacity. It links to data from the French Ministry of Ecological Transition, highlighting government plans for 30 % of electricity generation from renewables by 2030.

3. “Euro‑zone Markets: A Calm After the Storm” – A Bloomberg story that contextualizes the rally in French stocks within broader euro‑zone market performance. It highlights the role of ECB policy in sustaining confidence across the region.

4. “The Role of the Prime Minister in French Economic Policy” – An explanatory piece that outlines the constitutional powers of France’s prime minister, particularly in crafting economic policy and overseeing the civil service. The article emphasises how a shift in leadership can signal policy shifts to investors.

These links enrich the main story by offering readers insights into how the new prime minister might influence policy decisions and the potential ripple effects on European markets.

Analyst Perspectives

Jean‑Pierre Durand, Head of European Equity at Morgan Stanley
> “The French government’s swift resolution of the political crisis has sent a positive signal to markets. While we do not see an immediate shift in policy, the choice of prime minister will be a key factor in determining France’s stance on fiscal stimulus and industrial policy.”

Maria Sanchez, Chief Economist at the European Investment Bank
> “France has been a linchpin in the EU’s economic architecture. A new prime minister who aligns with European integration principles is likely to continue France’s commitment to fiscal prudence and support for green financing. That’s what investors are looking for.”

Eliot Roberts, Portfolio Manager at BlackRock Europe
> “In the short term, the reaction is a market correction from the over‑reaction to the no‑confidence motion. In the longer term, the prime minister’s policy priorities—particularly on energy, infrastructure, and digital transformation—will shape the trajectory of French stocks.”

Outlook

With the Paris market trending upward, the consensus among market analysts is that the political uncertainty has been largely quelled. However, investors are now watching closely for the first policy pronouncements from the new prime minister, particularly regarding fiscal stimulus, energy transition, and trade policy.

While the current rally is modest, it reflects a broader confidence that France will continue to pursue a stable, pro‑growth agenda, aligning with EU objectives and ensuring continued investor confidence. As the market moves, watch for any signs of policy shift in the upcoming months, especially as the new prime minister addresses the French Senate and prepares to introduce a legislative agenda.

Stay tuned for further updates on French political developments and their implications for European markets.