European shares down ahead of Sunday’s France’s election

On Friday European shares fell as France’s stock market extended its decline in the final session before the nation’s presidential election on Sunday.

The Stoxx Europe 600 Index slid 0.2 percent at 10:24 a.m. in London. France’s CAC 40 extended earlier declines to 0.9 percent, in a broad decline led by Total SA and Sanofi. The European regional benchmark is on track for a weekly drop of 0.9 percent, its steepest since late January.

France goes to the polls in a first round vote, with Emmanuel Macron and Marine Le Pen the front-runners to advance to the final election in May. France’s CAC 40 Index, the country’s equity benchmark, fell 0.5 percent. The murder of a policeman on the Champs-Elysees has forced an early end to campaigning for the leading candidates, with the race wide open, according to polls.

Danone dropped as much as 2.8 percent after reporting the third consecutive quarterly drop in volume and including its $10 billion takeover of WhiteWave Foods Co. in its organic growth for the year. European equities are still priced for a slight valuation premium linked to recent acceleration in global-growth momentum, and aren’t reflecting an “obvious political risk discount,” Deutsche Bank strategists including Sebastian Raedler wrote in a note.

Investors in European lenders are getting cold feet. Bets for swings in lenders’ stocks have jumped, and options reached their highest prices since February 2016 relative to those for euro-area blue chips.

Emerging-market assets are set to outperform their developed peers, weathering political risks from North Korea to the U.S. and Europe.

Emerging-market assets have won over investors including Goldman Sachs Asset Management and BlackRock Inc. amid improving prospects for growth. Their resilience to U.S. President Donald Trump’s protectionist rhetoric, rising tension on the Korean peninsula and European elections is also adding to their allure.