PARIS (Reuters) - Credit Suisse equity strategists raised their recommendation on French equities to “small overweight” from “benchmark”, partly on expectations that far-right leader Marine Le Pen was unlikely to win the country’s presidential election.
“We think the risk of a Le Pen victory is overestimated,” they wrote in a research note on Thursday.
“The 30 percent chance priced in betting markets is too high in our view,” they added.
Credit Suisse’s team said Le Pen’s National Front party was “more of a fringe movement” than that of U.S President Donald Trump or the Brexit campaign in the United Kingdom, and pointed to momentum for centrist, candidate Emmanuel Macron, seen as the most likely to win by many current opinion polls.
“Even if Le Pen wins, she would likely have very limited powers, making it extremely unlikely that she could pass a referendum on the EU,” they added.
France’s benchmark CAC-40 equity index is up around 2 percent since the start of 2017, slightly less than a 3 percent gain on the pan-European STOXX 600 index.
Reporting by Sudip Kar-Gupta; Editing by Bate Felix