UK loses stock market throne
London is no longer home to Europe’s biggest stock market, after Paris took over the mantle on Monday, according to Bloomberg. The outlet credits the strong performance of luxury brands like Louis Vuitton and Gucci and anticipates that Chinese shoppers will be eager to spend money as their pandemic restrictions are relaxed.
French equities now amount to $2.823 trillion, compared to $2.821 trillion listed on the UK exchange, Bloomberg reported, citing their own research data. Britain's equity value was $1.5 trillion greater than France in 2016, when the UK voted to leave the European Union in the “Brexit” referendum.
It was Brexit rather than the tax policy of the short-lived tenure of PM Liz Truss at 10 Downing Street that is to blame, former Bank of England official Michael Saunders told Bloomberg TV.
“The UK economy as a whole has been permanently damaged by Brexit,” he said. “The need for tax rises and spending cuts wouldn’t be there if Brexit hadn’t reduced the economy’s potential output so much.”
While Britain’s blue-chip stocks have fallen only 0.4% this year, the FTSE 250 was down by 17%, reflecting a “hammering” taken by the mid-capitalization shares of retailers and consumer-oriented brands.
Meanwhile, France’s luxury brands like LVMH SE and Kering SA – the owners of Gucci – are holding up “well” against global recession concerns. Louis Vuitton owners LVMH, valued at $360 billion, reported “record sales” in the US and expect a good Q4 in Chinese markets.
The British pound has also fallen 13% against the US dollar this year, while the euro slid only 9.2%, which favored the French in the comparison of stock exchanges, as the volume of both is measured in the American currency.