The key facts

  • Stoxx 600 fell 0.42% to 636.9 points; DAX 40 dropped 0.66%, CAC 40 — 0.31%
  • The yield on French 10-year bonds rose by 14 b.p. to 4.94%; the spread with German bonds — 148 b.p.
  • Trump blamed the unrest on 'migrants, jihadists and communists'

Indices continued to decline

European stock indices continued their negative trend on Tuesday amid mass demonstrations in France that erupted over the weekend. According to Anadolu, as of 10:30 local time, the Stoxx 600 index fell 0.42% to 636.9 points. Germany's DAX 40 lost 0.66%, closing at 25,150; Italy's FTSE MIB 30 fell 0.59% to 48,803; France's CAC 40 dropped 0.31% to 7,845; and Spain's IBEX 35 fell 0.08% to 19,024 points. Outside the eurozone, the UK's FTSE 100 declined 0.28% to 10,734 points.

Protests in France and Italy

The escalation of protests in France spread to some other European countries, heightening investors' perception of risk. French Prime Minister Sébastien Lecornu on Monday ordered local authorities to introduce partial curfews in certain areas. Paris also announced the creation of a special fund to support local authorities for restoring damaged public property and buildings. In Italy, drivers of trucks and semi-trailers began protesting against rising fuel prices, blocking entrances to roads and ports in the southern regions of the country.

US reaction and market dynamics

US President Donald Trump, at a rally in Kansas on Monday, blamed the unrest in France on 'migrants, jihadists and communists,' having earlier stated that 'a very sad situation (...) is related to immigration, not to schools, not to anything else.' On the debt market, the yield on French 10-year bonds rose by 14 basis points to 4.94%, while the spread with the yield on German 10-year bonds widened to 148 basis points. The euro, despite lingering risks, continued to recover against the US dollar, appreciating 0.2% to 1.1234.