European stocks opened lower on Monday as France dealt with the aftermath of a violent weekend marked by riots. The Euro Stoxx 50 dipped 0.1%, while the broader Stoxx 600 fell over 0.6%. France's CAC 40 index was down 0.5%, impacted particularly by a more than 2% drop in shares of retailer Carrefour, which reported that 50 of its stores were looted.
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French borrowing costs increased amid budget discussions in a divided parliament, with the yield on 10-year government bonds rising to 4.86%. This rate follows its recent peak, the highest since 2002. The spread between French and German debt stood at 143.5 basis points, nearing the levels seen during the euro debt crisis.
Moody's is set to review France’s Aa3 credit rating, which has a negative outlook, later this week. Other major European indexes also declined, including the UK’s FTSE 100, Italy’s FTSE MIB, and Spain’s IBEX 35, all falling between 0.4% and 0.6%. The DAX in Germany led the decline with a drop of over 0.8%, while the Netherlands’ AEX index was an exception, trading more than 0.4% higher.
The euro weakened by 0.2% against the US dollar, trading around $1.121, and also dropped to approximately £0.841 against the British pound. The currency recently hit its lowest levels against both currencies since mid-May and early June 2025, respectively, as France’s debt concerns and a strong US dollar overshadowed two interest rate hikes by the European Central Bank this year, which is scheduled to meet again on October 29.
In light of the weekend's unrest, estimates indicate that approximately 550,000 people participated in nationwide protests over rising living costs and education issues, which escalated into riots across major cities like Paris, Lyon, and Marseille. Interior Minister Laurent Nuñez reported 2,400 arrests and suggested that up to 1,000 law enforcement personnel may have been injured while managing the unrest.
Nuñez acknowledged shortcomings in readiness and control during the riots and offered to resign, although President Emmanuel Macron declined the offer, emphasizing the need for stability within security forces.
Carrefour CEO Alexandre Bompard indicated the total damage to retail could reach hundreds of millions of euros, with repairs at Carrefour alone estimated above ten million euros. Other business leaders, such as Thierry Guibert of Lacoste and Patrick Martin of Medef, echoed calls for government action to safeguard businesses.
Small retailers reported feeling abandoned, with one outdoor shop owner stating that police failed to respond quickly to looting. Prime Minister Sébastien Lecornu is scheduled to lead a crisis meeting, with Commerce Minister Serge Papin set to consult with various stakeholders, including trade unions, which have called for a national strike on November 5.