French PM Lecornu’s sudden exit plunges Europe into market turmoil
European stocks fell on Monday, with a sudden rise in political uncertainty following the resignation of France’s Prime Minister, Sebastien Lecornu.
The unexpected departure, coming just weeks after his appointment, triggered a broad market sell-off across the region.
The pan-European Stoxx 600 index slipped 0.4 per cent in London morning trade, snapping a five-day winning streak. However, the domestic French market bore the brunt of the investor panic, with the CAC 40 index tumbling 2 per cent shortly after the news broke, reflecting deep concern over the country’s deepening instability.
Read also: Sébastien Lecornu resigns as French Prime Minister
The event marks another setback for President Emmanuel Macron’s weakened government, which recently saw the collapse of former Prime Minister François Bayrou’s administration amid budget disputes. Analysts suggest this development significantly raises the likelihood of early elections and points to sustained market volatility ahead.
Financial stocks led the decline. French banking stocks were hit hardest, with Société Générale, BNP Paribas, and Crédit Agricole all dropping by more than 5 per cent. The bond market also signalled investor unease as the yield on France’s 10-year bond climbed to a 10-day high of 3.599 per cent.
In currency markets, the euro fell sharply, dropping 0.7 per cent to $1.1658, as traders weighed the implications of a fresh leadership crisis in the Eurozone’s second-largest economy.
