European shares slip as France unrest dents sentiment

European shares experienced a decline on Monday (Oct 19) as unrest in France impacted market sentiment. The pan-European Stoxx 600 index dropped 0.9% to 639.1 points, while the French CAC 40 index fell 1.1%, reflecting investors' concerns over the country's economic struggles and rising debt. The unrest, triggered by high prices and deteriorating public services, has soured investor confidence in a nation already facing weak growth and political uncertainty ahead of the 2027 presidential election.

French banks BNP Paribas, Societe Generale, and Credit Agricole witnessed a decline ranging from 2.5% to 3.4%. Other notable declines included retailer Carrefour (-2.2%) and shopping mall operator Unibail-Rodamco-Westfield (-2%). Spain's equities benchmark also saw a decline of 1.5% following a snap election scheduled for November, which raised doubts about Socialist Prime Minister Pedro Sanchez's ability to continue governing a leftist coalition.

Despite cyclical sectors, like banks and defense stocks, leading the declines, the technology sector was the only one with positive momentum, up 0.7%. European shares had previously outperformed US peers during a sell-off in AI-linked stocks due to concerns about debt financing for infrastructure. Investors were also anticipating earnings reports from European and US blue-chip companies, including SAP, Barclays, and Nokia.

In the US, Meta Platforms and chip firms' results might provide fresh direction for equity markets. Among individual movers, Barclays dropped 3.5% to its lowest level since mid-June, amidst concerns from an insider about the bank's representation of illiquid private credit loans' risk. Norway's Mowi increased 3.5% after its third-quarter harvest volumes reached an all-time high.