
News Topical, Digital Desk : The sudden resignation of French Prime Minister Sebastien Lecornu sent shockwaves through European markets on Monday. Lecornu had been in office barely a month, but his departure amid political instability has shaken investor confidence. France's CAC 40 index fell 2%, while the euro also slipped against the dollar. Major French banking stocks fell as much as 5%, and bond yields hit a 10-day high.
European stock markets opened in the red on Monday , shaken by the political crisis in France
The Stoxx 600 index fell 0.4%, while France's CAC 40 index fell 2%. This decline came immediately after the resignation of Prime Minister Sebastien Lecornu, who had assumed office only a few weeks earlier. The crisis deepened after the collapse of former Prime Minister François Bayrou's government and its failure to pass a budget. The possibility of early elections in France has also increased, increasing market uncertainty.
Bank shares fell sharply. The political instability has hit French banks the hardest. Shares of Societe Generale, BNP Paribas, and Credit Agricole all fell by more than 5%. Investors are concerned about government stability, which has increased pressure on the banking sector. Following this news, the French 10-year bond yield jumped to 3.59%, the highest level in the past 10 days. Political instability also impacted the euro and car companies, pushing the euro down 0.7% to $1.1658. Meanwhile, Aston Martin shares fell 10% after the company issued a profit warning citing tariff pressure. Renault also fell 1% as it plans to cut 3,000 jobs. Interestingly, while some auto companies remained under pressure, Stellantis shares rose 2.1%. Reports suggest the company is preparing to invest $10 billion in the US, leading to a 0.4% gain in the sector index.
Swedish bank Avanza Bank Holding was the biggest gainer on this down day. Its shares jumped 5% after the bank reported that it had added over 132,000 new customers to its customer base this year.
US markets steady, but eyes on Europe. US market futures remained steady, although investors remained cautious due to the government shutdown. Meanwhile, in Europe, Spanish industrial production data and UK and European construction PMI data will be released on Monday, which could determine the market's next move.
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