European stocks edged higher on Monday, recovering some ground after last week’s sell-off, while French equities weakened amid concerns over public finances and a sharp decline in Schneider Electric shares.
The pan-European STOXX 600 rose 0.2% to 632.42 points by 08:57 GMT. France’s CAC 40 fell 0.9%, reaching a six-month low. Schneider Electric dropped following its announcement of a deal to acquire US software company PTC, adding to pressure on the French benchmark.
The rebound followed a difficult week for European markets. On Thursday, the STOXX 600 lost 1.3% as rising global bond yields weighed on shares, particularly banks. Higher borrowing costs, energy-related inflation concerns and expectations of sustained elevated interest rates unsettled investors across both equity and bond markets.
France remained a particular source of anxiety. Investors have been questioning whether the government can deliver its proposed budget savings amid political divisions and public protests. Rising debt costs and uncertainty ahead of the 2027 presidential election have also weakened confidence in French assets. The euro fell to a 17-month low against the dollar on Monday as those concerns intensified.
French banks have also been under scrutiny. Recent market reporting showed lenders including Société Générale and Crédit Agricole underperforming the broader European market, while the premium investors demand to hold French government debt increased. These developments have raised concerns about tighter financing conditions and possible spillovers into other European debt markets.
Elsewhere, weaker-than-expected US employment data reduced expectations of another Federal Reserve interest-rate increase this month, helping support market sentiment. Nevertheless, elevated bond yields and concerns about government finances continued to limit confidence. Monday’s modest European gains therefore represented a partial recovery, with France’s weakness highlighting the uneven outlook across the region.
