The London Stock Exchange has reclaimed the crown from Paris to once again become Europe's biggest stock market by valuation as France is rocked by political turmoil.
The combined market capitalization of all London-listed companies reached $3.178 trillion at the close on Monday, outpacing Paris on $3.136 trillion, according to closing levels Monday recorded by Bloomberg.
London has been boosted in recent months by cooler inflation, growing takeover activity and potential flotations, helping its top-tier FTSE 100 index to reach record highs.
"(President) Emmanuel Macron's decision to plunge his country into political turmoil has jolted French investors," noted Danni Hewson, head of financial analysis at stockbroker AJ Bell.
Paris' benchmark CAC 40 shares index slumped more than 6% last week after Macron called a snap election following a surge in support for the far right in EU parliament polls.
That wiped out gains so far this year – and was its worst weekly performance since March 2022, shortly after Russia invaded Ukraine.
Prior to this week, Paris had been Europe's biggest stock market since early 2023.
"Although some of the risk-off sentiment which spread sparked by worries about the far-right gaining legislative power in France has eased off, Paris-listed stocks have made only a feeble recovery," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
The Paris market, which also hit record highs this year, has suffered in recent weeks additionally from sharp losses to the share price of French luxury goods giant LVMH as Chinese demand dampens.
London's stock market, which has become also the world's sixth biggest stock market by value, is faring well ahead of a U.K. general election on July 4, when the main opposition Labour party is forecast defeat the ruling Conservatives, led by Prime Minister Rishi Sunak.
"The steady poll lead of Labour in the U.K. means a change of the guard has largely been priced in," Hewson added.
