French stock markets remained steady despite the collapse of Michel Barnier’s government following a no-confidence vote on Wednesday. On Thursday morning, the CAC 40 index rose by 0.65%, continuing gains from the previous day’s 0.66% increase.

The euro also showed little change, reflecting investor confidence. The French 10-year bond yield remained stable at 2.886%, signaling calm in the bond markets.

Limited Market Impact

The government’s fall, driven by the National Assembly’s rejection of a contentious budget, had minimal effect on market performance. Analysts suggested the no-confidence vote had been priced in earlier this week, evidenced by a rise in French borrowing costs above Greece’s for the first time.

Banking shares saw notable gains, with BNP Paribas and Credit Agricole rising around 2% and Societe Generale up nearly 3%. The modest market reaction indicated that investors viewed the political developments as unlikely to disrupt economic fundamentals.