European Bank Shares Feel Pressure of EU Election Fallout

By Elena Vardon

European bank shares traded lower Tuesday, extending losses from a market selloff a day ago that was triggered by right-wing gains in the European elections.

At 1343 GMT, the Euro Stoxx Banks index was down 2.7%, after closing 1.5% lower the previous session. The overall Stoxx 600 traded 1% lower.

The results of Europe's elections on the weekend prompted French President Emmanuel Macron to dissolve parliament and call a snap election, with France's far-right opposition party National Rally poised to be among the pan-European election's biggest winners.

The political uncertainty damped investors' appetite for risk.

"In many European jurisdictions, banks have become a soft target for populist measures such as windfall taxes and restrictions on dividends/share buybacks," Morningstar analyst Johann Scholtz said.

Among the European bank shares, Credit Agricole traded 4.4% lower, Monte dei Paschi was down 4.2%, and Commerzbank fell 3.5%.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

June 11, 2024 10:31 ET (14:31 GMT)

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