European stocks drop as political worries weigh on French banks
The Stoxx Europe 600 is down 0.7% by the close
European stocks slid 0.7% on Friday as political uncertainty weighed on French banks, with BNP Paribas and Societe Generale suffering losses of over 4%. The Stoxx Europe 600 ended the day weaker, with the French CAC 40 falling the most among major country indices. The drop came as key presidential candidates launched their economic plans at a Medef business federation conference, reigniting concerns about the country's political stability.
The construction sector underperformed, after Eiffage reported first-half results below expectations. Meanwhile, food and beverage shares suffered after Pernod Ricard slashed its outlook and fell more than 4%. Tech stocks, however, rose after Nvidia unveiled a bullish sales outlook in the US, easing fears that artificial intelligence spending was faltering.
Analysts noted that European equities were less positioned to benefit from the AI cycle. Looking ahead, attention shifted to the Jackson Hole Economic Policy Symposium, set to begin on August 28, which could provide insights into the US Federal Reserve's interest rate trajectory. In other stock movements, Aker ASA led gains in the Stoxx 600, up 7% following a $45 billion US deal for its portfolio company Nscale Global Holdings.
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