European equities accelerated losses on Monday as French assets plunged amid worsening political instability in Paris. The Stoxx Europe 600 fell 0.8%, and investor caution is mounting ahead of a pivotal week for global corporate earnings.
The pan-European Stoxx Europe 600 Index fell 0.8%, as investors priced in elevated sovereign risk across the eurozone's second-largest economy. The drop put the benchmark on track for its worst single-day decline in over a week.
France's CAC 40 plunged 1.1%, its worst single-day performance in two weeks. Spain's IBEX 35 and Italy's FTSE MIB tumbled 1.5% and 1.6%, respectively, hit by broader contagion across Southern European financial and rate-sensitive equity names.
Germany's DAX dropped 1.2%, while London's FTSE 100 traded 1.1% lower after earlier flat levels.
Unrest in France is the primary source of continental stress
France suffered one of its worst days of social unrest in years over the weekend. Thousands of protesters took to the streets across major cities over high prices, inflation and declining public services, resulting in mass arrests, widespread property damage and looted retail stores.
French lenders BNP Paribas, Societe Generale and Credit Agricole fell between 2% and 4%. The weekend's riots also laid bare political dissatisfaction with President Emmanuel Macron, whose final term ahead of 2027 has become increasingly defined by social discontent, a weak economy and a ballooning national debt.
UBS analysts said the fiscal situation in France is unlikely to improve materially in the near term. According to UBS: "We do not expect a broader European debt crisis."
Earnings and oil shape the week ahead
Markets are bracing for a dense schedule of releases as the earnings season continues, after disappointing sales figures from LVMH marked a rocky start to the third-quarter reporting period. EssilorLuxottica and Kering are scheduled to report, and traders will look for signs of stable consumer demand.
SAP and BE Semiconductor also report, and their shares were up 0.8% and 1.3%, respectively. Meta Platforms reports third-quarter earnings on Wednesday.
Oil prices slid after U.S. President Donald Trump issued an executive order waiving specific sanctions and tariffs under the Lindsey Graham Act regarding Russian energy transactions, cushioning the equity downside.
Source: Investing.com
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