AXA’s share price tumbled 10% today as jittery markets feared France was getting sucked into the eurozone crisis.

Investors have been heavily selling off shares in French banks and insurers as fears mount that France will join America in losing its triple AAA rating.

There are concerns that France, already struggling with high Government debt and a 7.1% national defecit, simply cannot afford to contribute to bail out Italy and Spain without damaging its own ability to repay its debts.

A French downgrade of ability to repay its debts would in turn hit the bond prices of French government debt.

That would then feed through into the balance sheets of insurers and banks,which hold the debt, eroding shareholders’ equity.

AXA is considered fairly robust at present by investors, but in the unlikely event that France gets sucked into a debt spiral in attempts to defend the euro, and subsequently suffers downgrades, it could impact AXA’s shareholders’ equity.

French reinsurer Scor also suffered today as its share price dropped 6%.

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