London wins back crown from Paris: UK stock market biggest in Europe once again

London has regained its crown as Europe’s biggest stock market after political turmoil in France sent shares in Paris tumbling.

In a major boost for the City, data compiled by Bloomberg showed UK stocks are valued at £2.51 trillion.

That is more than the £2.47 trillion collective valuation of those listed in France after a rout last week that saw the Cac 40 index in Paris fall by more than 6 per cent.

It was one of the largest weekly declines for more than two decades and means London is back on top spot, having lost its crown to Paris 18 months ago.

However, the figures highlight the difference between the major European exchanges and the US, where Apple and Microsoft are both valued at almost £2.6 trillion each.

The biggest company on the London market is AstraZeneca, with a value of £193billion, while in Paris, Louis Vuitton owner LVMH is the largest at £320billion.

Shares in Paris have been hammered since president Emmanuel Macron last week called a snap election following a bruising setback in European polls that saw his Renaissance party trounced by Marine Le Pen’s far-Right Rassemblement National (RN).

Analysts warned the outcome of the looming election remained highly uncertain. Investors are concerned that RN’s big spending plans could trigger a French debt crisis.

Shares in French banks Societe Generale, BNP Paribas and Credit Agricole – all big holders of government debt – fell more than 10 per cent last week.

Sterling is also trading around its highest levels against the euro for almost two years as Macron’s decision continues to reverberate on financial markets.

‘We are in a period where there are no certainties for three to four weeks and the market could unfortunately become more unstable,’ said Alberto Tocchio, fund manager at Kairos Partners.

By contrast, the outcome of the UK election looks far more certain, such is the Labour lead in the polls.

London overtaking Paris will be seen as another welcome sign that the City is fighting back amid heightened concerns about its status as a leading global financial hub. 

The UK stock market is widely seen as undervalued – leaving companies vulnerable to foreign bidders on the hunt for a bargain, while other firms look to list elsewhere such as in New York.

But there are signs that the tide is starting to turn and shares in computer maker Raspberry Pi have soared more than 55 per cent since it listed in London last week, giving it a value of almost £850million.

The FTSE 100 index hit a string of record highs last month. 

The Cac 40 was also at all-time highs earlier this year but has given up its gains and is now broadly flat since the start of 2024.

Russ Mould, investment director at AJ Bell, said Macron’s election ‘gamble’ could ‘backfire, given the far-Right is rising high in the polls’.