The key facts

  • The CAC 40 fell 1.56% to 7,832 points, the DAX 40 fell 1.36% to 25,274, and the FTSE MIB 30 fell 1.77% to 48,970.4
  • Shares of BNP Paribas, Societe Generale and Credit Agricole fell 2–2.5%, AXA fell almost 2% to €42.2
  • The euro weakened 0.12% to $1.1230; the spread on French–German 10-year bonds was around 140 b.p.

Stock market sell-off over protests

Mass protests in France held over the weekend triggered a large-scale sell-off on European stock markets. According to Anadolu, as of 16:00 local time the German DAX 40 lost 1.36% and fell to 25,274 points, the French CAC 40 declined 1.56% to 7,832 points, and the British FTSE 100 dropped 1.29% to 10,741.51 points. The Italian FTSE MIB 30, sensitive to the political situation in Europe, plunged 1.77% to 48,970.4 points. The publication also links the fall of Spain's IBEX 35 by 1.8% to 18,978 points to the early elections scheduled for next month.

Banks, insurers and defense companies under pressure

The banking and defense sectors suffered the most. Shares of France's leading banks — BNP Paribas, Societe Generale and Credit Agricole — fell 2–2.5%. France's largest insurance group, AXA SA, lost almost 2%, dropping to €42.2 ($47.4) per share. Investors took a wait-and-see position.

Currency market and debt securities

The euro fell 0.12% against the dollar to $1.1230. Overnight the rate dropped below 1.120, but in the morning there were signs of a slight recovery. Government bonds came under serious pressure: events in France heightened political uncertainty ahead of the 2027 presidential election.

Analysts' assessments and expectations for the week

ING Group currency strategist Francesco Pesole noted that the ongoing protests will weigh on French stocks and limit the euro's recovery potential against the dollar. In his assessment, the euro is undervalued against the dollar by 1.3–1.5%, while France's fiscal risks remain in the market's focus, which is reflected in the yield spread on 10-year French and German government bonds of around 140 basis points. Investors' attention this week is focused on earnings reports from SAP, Barclays and Nokia, and on Tuesday Germany's economic sentiment data (the ZEW index) will be released.