By ForexTime
The left-wing coalition won the largest amount of seats but could not secure a majority – resulting in a hung parliament outcome.
Note: 289 seats are needed for absolute majority
With no party close to securing a majority, this could spell months of turmoil and political instability.
But this also means that neither the left nor right party can implement their plans into action, without support from others to pass legislation. This could cool fears around more spending and deeper deficits at a period where France remains under the European Union’s scrutiny for breaking budget rules.
Looking at the charts, the FRA40 bounced from the 200-day SMA on Monday morning with prices trading above 7700 as of writing. Despite the political gridlock down the road, the overall market reaction seems positive.
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Note: FRA40 tracks the underlying CAC 40 Index
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