French banks fall as hedge funds pare bets on political risks

Societe Generale SA

27/08/2026 12:52

** French bank stocks fall sharply as investors grow wary of the country's political and fiscal outlook ahead of next spring's presidential election, weighing on domestic assets
** Traders say political risk is prompting hedge funds to trim long positions in French lenders ahead of the first presidential debate later on Thursday
** Societe Generale SOCG.PA, BNP BNPP.PA and Credit Agricole CAGR.PA fall between 3.8% and 4.5%, underperforming a 1.2% drop in the STOXX Europe 600 Banks index .SX7P
** France's budget battle, set against a hung parliament and the presidential ballot, has pushed the French-German 10-year bond spread DE10FR10=RR to its widest since late 2024, adding pressure on equities
** Fitch is due to review France's sovereign rating on Friday. France has one of the highest deficits in the euro zone

 (Reporting by Hugo Lhomedet, Danilo Masoni and Samuel Indyk)
 ((hugo.lhomedet@thomsonreuters.com))