European stocks open in the red as French businesses count the cost of the riots

European stocks experienced a downturn at the beginning of trading on Monday, as France grappled with one of its most violent weekends in recent years. The Euro Stoxx 50 and the broader pan-European Stoxx 600 both suffered declines, with the latter falling over 0.6%. The CAC 40 in France lost 0.5%. Retail giant Carrefour, which reported that 50 of its stores were targeted by looters, saw its shares drop more than 2%.

French borrowing costs rose as the 10-year government bond yield hit its highest level since 2002, at 4.86%, with the gap to German debt nearing its widest since the euro debt crisis.

Moody's, the ratings agency, reviewed France's Aa3 credit rating and issued a negative outlook, signaling concern about the country's financial stability. European counterparts such as the UK's FTSE 100, Italy's FTSE MIB, and Spain's IBEX 35 also saw declines of 0.4% to 0.6%. Germany's DAX dropped more than 0.8%, while the Netherlands' AEX traded more than 0.4% higher.

The unrest in France was sparked by nationwide protests against rising living costs and the state of French schools, which escalated into rioting and looting in major cities such as Paris, Lyon, Marseille, and Bordeaux. Interior Minister Laurent Nuñez reported that 2,400 people were arrested, and between 500 and nearly 1,000 police officers, gendarmes, and firefighters were injured.

Nuñez admitted a lack of anticipation and loss of control in some cities but was refused permission to resign by President Emmanuel Macron, who emphasized the need for unbroken command from security forces.

Retail industry leaders, including Carrefour CEO Alexandre Bompard and fashion brand Lacoste CEO Thierry Guibert, called on the French state to protect businesses and staff. Intermarché CEO Thierry Cotillard expressed deep anger, while employers' group Medef head Patrick Martin condemned the looting as unacceptable. Prime Minister Sébastien Lecornu and Commerce Minister Serge Papin were set to meet various stakeholders in an effort to address the situation. Unions have also called for a national strike on November 5.