Inconclusive French Parliamentary Vote Leaves Investors on Edge

French stocks rallied Monday as the country’s snap legislative elections left no party with a majority in the National Assembly, even as investors warned of market turbulence in the coming weeks as political gridlock looms.

The CAC 40 Index reversed an early decline, rising 0.5% at 11:51 a.m. in Paris, as dip buyers emerged, treating the election outcome as the “least bad” scenario. Even after a rally last week, the stock benchmark is still down 3.5% from its level before President Emmanuel Macron called the election on June 9.

Anxiety is still high as traders fret government spending ...