By Joao Manuel Vicente Mauricio and Ankika Biswas
(Reuters) -Europe’s main share index fell on Monday, as investors sold off French stocks due to concerns over the country’s political turmoil, while Stellantis (NYSE:) slid, dragging the automobile sector down following the carmaker’s abrupt CEO resignation.
The pan-European index was down 0.1% as of 0935 GMT, with France’s benchmark dropping 1% and underperforming regional bourses.
French bonds and the euro also took a hit, with the country’s borrowing costs rising above Greece’s for the first time.
In a worsening political crisis, France’s far-right National Rally’s president Jordan Bardella said the party would force the collapse of Prime Minister Michel Barnier’s government unless in a “last minute miracle” he yields to their demands on the budget.
Swissquote Bank’s senior market analyst Ipek Ozkardeskaya said there seems to be no solution to both please Marine Le Pen’s (leading RN lawmaker) asks and reduce the budget deficit in line with EU demands. Barnier could make concessions but will have to convince investors that things will work, she added.
Meanwhile, Paris and Milan-listed Stellantis’ shares slumped 8% each after CEO Carlos Tavares’s resignation. The automobile index emerged as the worst-hit, down nearly 2%, with Renault (EPA:) and Valeo (EPA:) dropping 3% each.
Additionally, the CAC 40 was dragged by lenders such as Credit Agricole (OTC:), Societe Generale (OTC:) SA and BNP Paribas (OTC:), falling 1%-2%.
Chip stocks dragged down the tech index, as the U.S. is set to launch its third crackdown in three years on China’s semiconductor industry.
Delivery Hero slid 8% as the German delivery company said that its freelance riders at its Glovo unit in Spain would be hired as employees.
Galp rose 4.3% to the top of the STOXX 600 after a positive update on its Namibia oil exploration.
Akzo Nobel (OTC:) gained 3.2% after J.P. Morgan upgraded the Dulux paints maker’s stock to “overweight” from “neutral”.
PZU (WA:) climbed 3% after Poland’s biggest insurer announced a new strategy aimed at higher-than-expected profit.
