Political Turmoil in France Fuels European Stock Market Fluctuations

European markets rose to a one-month peak despite political uncertainty in France, where a no-confidence vote threatens Prime Minister Barnier. The STOXX 600 gained amid retail sector strength, but France's CAC 40 has declined due to fiscal instability and discord about addressing the budget deficit.

The European stock markets hit a new high, driven by German stocks surpassing the 20,000 mark. Amidst this, all eyes are on France, as a no-confidence vote in parliament threatens to topple Prime Minister Michel Barnier's government. The pan-European STOXX 600 index advanced for the fifth consecutive session, with retailers leading the sectors.

France's CAC 40 index gained 0.6% during ongoing debates on the no-confidence motion, with a critical vote expected soon. Barnier's government might collapse as France grapples with a significant budget deficit. President Emmanuel Macron plans to swiftly appoint a new prime minister if the current government falls.

Political tensions in France contributed to declines in business activity and widened bond spreads. Conversely, Germany's DAX breached 20,000 points, bolstered by SAP's growth. In corporate performances, Hugo Boss, Hexagon, and Stellantis were notable gainers, while Signify, AstraZeneca, and Novartis faced downgrades.

(With inputs from agencies.)