French Politics Keep A Heavy Lid On Equities With S&P Update Due Friday

By Michael Msika and Julien Ponthus, Bloomberg Markets Live reporters

Political turmoil is once again roiling French stocks, with investors likely to keep applying a hefty risk premium to the nation’s assets.

S&P Global Ratings is set to publish an update to its outlook for the euro area’s second-biggest economy on Friday, adding to uncertainty over the budget and the fate of the government. The situation has already driven up borrowing costs versus peers and sent stocks plunging. French equities are set for their worst under-performance against European peers since 2010, the only other time during the common-currency era that the CAC 40 has trailed by more than 10 percentage points.