European stocks extend slide as French unrest triggers de-risking

European stocks continued their downward trend on Tuesday (Oct 20) as political turmoil in France weighed on investor sentiment and reduced appetite for risk. The Stoxx 600 index, a broad-based indicator of European stocks, fell 0.27 percent to 637.84 points, after declining 0.8 percent the previous day. France's main CAC 40 index also slipped by 0.2 percent.

On Monday evening, French authorities enacted curfews in several cities, including Paris, Lille, and Nice, following a weekend of violent protests sparked by nationwide anti-government demonstrations. The unrest has intensified pressure on France, the euro zone's second-largest economy, which is already facing sluggish economic growth and a ballooning national debt. The demonstrations have also highlighted the challenges the government faces in bringing its deficit under control.

Meanwhile, corporate earnings reports provided further insights into market sentiment. French cloud services provider OVHcloud experienced a surge, rising 8.5 percent after announcing its first positive levered free cash flow since its 2021 initial public offering, with revenue up 7.2 percent to 1.15 billion euros ($1.29 billion) in the fiscal year ending August.

However, visualization technology firm Barco saw its shares drop 12.9 percent after it predicted full-year sales would fall slightly short of last year's figures, with an EBITDA margin projected at around 11 percent.