European stocks experienced a decline on Monday in response to the unexpected resignation of France’s Prime Minister Sebastien Lecornu. The pan-European Stoxx 600 experienced a decline of 0.4% at approximately 9:05 a.m., following a streak of five consecutive days of positive returns in the previous week, which included reaching an all-time high during Thursday’s session. France’s CAC 40 index experienced a decline of 2% shortly following Lecornu’s resignation, which occurred just weeks after his appointment, igniting new political turmoil.
The recent development comes in the wake of the downfall of François Bayrou’s administration, which struggled to secure approval for the state budget, thereby opening the door to the possibility of new elections. French banks were among those leading the losses, with Societe Generale, BNP Paribas, and Credit Agricole all down more than 5%. The yield on France’s benchmark 10-year bond increased to a 10-day high of 3.5990% following the news, while the euro experienced a significant decline, last recorded approximately 0.7% lower at $1.1658. Shares of Aston Martin declined approximately 10% following the luxury carmaker’s profit warning, which highlighted ongoing tariff pressures. Renault experienced a decline of over 1% following reports indicating that the French auto manufacturer intends to reduce its workforce by 3,000 positions in the finance, marketing, and HR departments.
Europe’s autos gained 0.4% overall in early trading; however, Stellantis saw its share price advance 2.1% amid reports that the multinational automaker is set to invest about $10 billion in the U.S., with new manufacturing plants in Illinois and Michigan. Avanza Bank Holding emerged as one of the top performers early Monday, experiencing an increase of approximately 5% following the announcement from the Swedish online bank regarding a growth in its customer base by over 132,000 this year. U.S. equities exhibited minimal variation Sunday night, following ongoing government shutdown. Investors seem to have dismissed concerns regarding the shutdown, which has postponed the publication of crucial economic indicators — notably the September jobs report — that was initially scheduled for release on Friday.
On Monday in Europe, the data releases will encompass Spanish industrial production figures alongside the construction PMIs for both Europe and the U.K., which serve as indicators of business activity within the sector. In the Asia-Pacific markets overnight, Japan’s Nikkei 225 index surged more than 4% to reach a record high following the election of Sanae Takaichi as the new leader of the ruling Liberal Democratic Party, setting the stage for her potential role as the country’s first female prime minister.