Turmoil in France Sends Shockwaves Through European Markets

The European share index dropped as investors reacted to France's political unrest and the abrupt resignation of Stellantis' CEO. The STOXX 600 fell 0.1%, while the CAC 40 underperformed. France's borrowing costs increased, and sectors like automobiles and tech faced challenges, although some companies saw gains.

Europe's primary share index experienced a decline on Monday as investors offloaded French stocks amidst growing political uncertainty in the country. The resignation of Stellantis' CEO further impacted the automobile sector, leading to a notable downturn.

The pan-European STOXX 600 index dropped by 0.1% as of 0935 GMT, with France's CAC 40 decreasing by 1%, marking the region's most significant underperformance. The financial pressure in France was evident as its borrowing costs surpassed those of Greece, affecting both the bonds and the euro.

In an escalating political crisis, the far-right National Rally's leader, Jordan Bardella, threatened to destabilize Prime Minister Michel Barnier's government unless budgetary demands were met. Meanwhile, Stellantis' shares plummeted 8% due to CEO Carlos Tavares's unexpected resignation, marking a substantial hit for the automobile index. Other sectors like tech also faced hits, though some companies like Galp and Akzo Nobel noted gains.

(With inputs from agencies.)