FX.co ★ European Stocks Retreat After French PM Resignation

European stock markets experienced a decline on Monday, with the STOXX 50 dropping by 0.7% and the STOXX 600 falling by 0.4%. This downturn came after both indices had reached record highs the previous Friday. Investors were unsettled by the resignation of French Prime Minister Lecornu, who stepped down just weeks into his role, coinciding with President Macron's announcement of a new government. Meanwhile, in the Czech Republic, the election results saw right-wing populist Andrej Babis secure a victory, and in Japan, Sanae Takaichi was essentially confirmed as the upcoming premier. This development in Japan has sparked expectations of further fiscal stimulus and the continuation of a loose monetary policy. French stocks were notably hard-hit, with significant losses posted by companies such as LVMH (-2%), Hermès (-1.6%), L’Oréal (-1.5%), AXA (-3.5%), BNP Paribas (-5.2%), and Vinci (-3.2%). However, the decline was somewhat offset by gains in technology and energy stocks. ASML Holding saw an increase of 1.4%, BP rose by 1.2%, Glencore went up by 0.9%, and Thyssenkrupp recorded solid gains of 2.6%.