Source: Sharecast
After swinging between gains and losses for most of the session, the pan-European Stoxx 600 closed just 0.02% higher at 570.55. The minimal gain still marked the seventh straight session in positive territory for the benchmark, and a new record closing high.
Indices across London, Milan and Madrid finished marginally in the red, while stocks in Frankfurt and Zurich edged higher.
However, the CAC 40 in Paris dropped 1.3% after France’s new prime minister resigned, deepening the political turmoil engulfing the country. Sebastien Lecornu, an ally of under-pressure president Emmanuel Macron, submitted his resignation on Monday morning, just hours after he had named cabinet. He had been prime minister for less than a month.
The new cabinet was due to meet for the first time on Monday afternoon. However, allies across the political divide were disappointed with the line-up, and threatened to withdraw their support, prompting Lecornu’s shock departure.
The euro was down 0.3% against the dollar at $1.1705, trimming earlier losses, while French 10-year bond yields climbed 6 basis points to 3.574%.
“There’s growing concern about the precarious nature of France’s political system, with investors increasingly pricing in a risk premium as the country is once again searching for a new prime minister," said AJ Bell's head of financial analysis Danni Hewson. "The big question here is what happens next, because after five prime ministers in two years finding a workable solution, even a temporary one, has become increasingly difficult."
Wall Street markets also got off to a subdued start as rising enthusiasm for M&A activity and AI investments was met with ongoing uncertainty regarding the government shutdown and associated data delays.
In economic data, retail sales across the eurozone partially rebounded in August after their steepest drop in two years the previous month, according to data out on Monday from Eurostat. The volume of retail trade increased by just 0.1% during the month, matching economists' projections following a revised 0.4% decline in July.
In other news, the eurozone Sentix Investor Confidence Index rose to -5.4 from -9.2 in September, coming in ahead of the consensus forecast of -7.5. The HCOB eurozone construction PMI total activity index fell to 46.0 from 46.7 in August, signalling a deepening contraction (seen by readings under 50).
Market movers
French industrial conglomerate Compagnie de Saint-Gobain was 3% weaker after underwhelming with a set of medium-term financial targets, pushing for mid-single-digit growth in sales between 2026 and2 2030. The company also guided to an EBITDA margin of 15-18% during the period, ahead of previous expectations of 13-15%.
Germany reinsurer Hannover Re gained 3% after raising its dividend payout policy to 55% of net profits, up from 46% last year.
In London, Aston Martin dropped 8% as the luxury carmaker warned on profits and launched an immediate review of costs on Monday, after US tariffs crashed third-quarter demand.
UK banks were also lower as speculation builds about a possible increase in taxes in next month's Autumn Budget – notably the banking surcharge or the interest on Bank of England reserves – with NatWest, Lloyds and Barclays all in the red.
"UK banks are heading into the autumn Budget with a target on their backs. After a run of bumper profits – around £53 billion expected this year for the big five – the sector looks like an easy source of revenue as Chancellor Rachel Reeves searches for ways to plug the fiscal gap without breaking household tax pledges," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
