Paris overtakes London as Europe’s largest stock market
LONDON has been stripped of its crown as Europe’s largest stock market after being overtaken by Paris as recession jitters hurt UK stocks.
The market value of stocks in Paris has edged ahead of those in London in dollar terms after wiping out a $1.4trillion (£1.2trillion) gap since the Brexit vote, calculations by Bloomberg revealed.
The pound’s plunge versus the dollar, recession worries hitting Uk-focused stocks and the rebound of France’s heavyweight luxury shares, including LVMH, have caused the reversal.
London’s combined market capitalisation is at $2.821trillion compared to $2.823trillion for French stocks, according to Bloomberg.
It marks a huge reversal of fortunes in the last decade with UK stocks almost $2trillion larger in dollar terms than their French rivals at one point in 2014 when the pound was much stronger.
London has gained a reputation as an “unloved” market in recent years as economic malaise and persistent political uncertainty has put off investors.
While the FTSE 100 looks set to end the year as one of the better global performers in a grim year for markets, the domestic-focused FTSE 250 is nursing an 18pc loss in sterling terms in 2022.
Graham Secker, stocks strategist at Morgan Stanley, warned that UK stocks could suffer next year as the economic backdrop deteriorates significantly. The Wall Street bank expects the UK to suffer a deeper downturn than any other European economy in 2023, followed by a lacklustre recovery in 2024.
After a tough year, global stocks have started to bounce back in recent days amid hopes of cooling inflation.
Stock markets have been knocked by rising interest rates and predictions of recession. However, signs that the Federal Reserve will be able to take less drastic action to tame inflation triggered the biggest surge in US stocks in two years on Thursday. The global rally was sparked by the US inflation rate falling quicker than economists expected in October, causing traders to cut their bets on interest rates.