European stocks climb as French no-confidence vote looms; Indian PSU banks lead gains

European markets edged higher on Wednesday as investors navigated political uncertainty in France ahead of a crucial no-confidence vote in its parliament.

Meanwhile, Indian markets saw strong performance in public sector banks, with financial stocks rallying on expectations of policy easing by the Reserve Bank of India (RBI).

The French CAC 40 index rose 0.3% in early European trading hours, with investors closely watching the political drama surrounding Prime Minister Michel Barnier’s government.

This week, Barnier invoked special constitutional powers to push through a contentious budget bill, bypassing a parliamentary vote.

The move has sparked two no-confidence motions, one led by left-wing rivals and another supported by the far-right National Rally party.

Analysts widely expect the government to collapse after the vote, which could usher in a period of heightened political and market uncertainty.

Elsewhere in Europe, the autos sector led gains on the Stoxx 600 index, advancing nearly 1%.

Italian newspaper Corriere della Sera reported that Stellantis is considering outgoing Apple Chief Financial Officer Luca Maestri as a candidate for its CEO role, fueling investor optimism.

Conversely, stocks in healthcare, food and beverage, and basic resources lagged, reflecting a mixed trading session.

South Korea’s political turmoil under scrutiny

Beyond Europe, political upheaval in South Korea also caught investors’ attention.

Markets in Asia-Pacific opened lower following President Yoon Suk Yeol’s abrupt declaration and subsequent withdrawal of martial law within hours.

The move triggered widespread protests and prompted opposition lawmakers to consider impeachment proceedings.

Investors are bracing for further developments as South Korea’s parliament prepares to vote on Yoon’s future within 72 hours.

Indian markets: PSU banks shine amid RBI policy hopes

In India, benchmark indices Nifty and Sensex experienced intraday volatility, ultimately closing with marginal gains as banking and realty stocks outperformed.

However, sectors like auto, FMCG, and metals struggled, capping broader market gains.

At the close, the Sensex added 110.58 points, or 0.14%, to finish at 80,956.33, while the Nifty rose 10.30 points, or 0.04%, to end at 24,467.45.

A total of 2,307 stocks advanced, 1,507 declined, and 95 remained unchanged.

Public sector banks stole the spotlight, with the PSU Bank Index surging over 2%, extending its rally from the previous session.

State Bank of India (SBI), the nation’s largest public-sector lender, gained nearly 2%.

Other major gainers included UCO Bank, Central Bank, Indian Overseas Bank, and Punjab & Sind Bank, with their shares climbing between 6% and 9%.

Market sentiment was buoyed by speculation that the RBI might announce a cut in the cash reserve ratio (CRR) during its upcoming policy meeting.

Such a move could inject additional liquidity into the banking system, further fueling gains in the financial sector.

With France’s political landscape hanging in the balance and South Korea grappling with turmoil, global markets remain on edge.

Meanwhile, India’s banking sector offers a bright spot, as policy measures from the RBI could provide a much-needed liquidity boost.

As these narratives unfold, investors will continue to monitor developments closely for potential market shifts.

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