A shock election win for France's leftist alliance has reinforced wariness among investors who had already braced for the risk of political deadlock and a policy paralysis that's unlikely to improve the country's creaking public finances.

The left-wing New Popular Front (NFP) alliance won the most seats in Sunday's election — a big surprise after Marine Le Pen's far-right National Rally (RN) led opinion polls — but fell far short of an absolute majority.

France, at the center of the euro project and the bloc's second biggest economy, still faces a hung parliament and taxing negotiations to form a government as markets had already anticipated — just with the left in pole position, rather than the far-right.