European stock markets closed with significant declines. The Stoxx 600 fell by 0.8% in a session affected by political and fiscal tension in France. The index gave back part of the gains accumulated the previous week.
Technology recorded the best relative performance, while the utilities and banking sectors fell by more than 1.6% due to the strong rise in Eurozone yields led by France, which concentrated the selling, with a decline close to 2%. Among companies, Barclays fell by 3.6% after a review by the Bank of England regarding the treatment of transactions related to private credit was announced.
By indices, the IBEX 35 lost 1.5%, while the Euro Stoxx 50 declined by 1.0% and the CAC 40 by 1.1%. The main European markets closed the session in negative territory.
Key points of the session
The weekend disturbances in France raised doubts about the Government's ability to implement its budget adjustment. The risk of new spending concessions added pressure on public accounts. The French risk premium surged by 10 basis points, approaching 150 basis points, reflecting a higher return requirement from investors to hold the country's debt.
In China, GDP grew by 4.5% year-on-year in the third quarter, compared to 4.3% in the second. Industrial production increased by 5.5% in September, while retail sales rose by 1.1%, improving from 0.4% in August. The rebound in activity did not dispel the weakness of domestic demand, with industry maintaining firmer growth than consumption, and real estate investment continued to decline.
At the European close, the S&P 500 was up 0.9% and the Nasdaq was up 1.7%. Companies linked to artificial intelligence were regaining ground.
Fixed Income
German and US benchmarks lost morning support and their yields rose from intraday lows. The movement ended with them slightly above Friday's close, so the balance was not of a sustained recovery in bond prices.
The yield on the 10-year German Bund was around 3.45%, with a rise of 3 basis points. In the United States, the yield on the 10-year US Treasury reached 5.14%, 6 basis points above Friday, after having dropped to around 5.05% during the session.
Commodities and currencies
Brent fell by around 1.3%, settling at 108.5 dollars per barrel. The suspension of certain US sanctions and tariffs on Russia improved fuel supply prospects. The measure did not eliminate previous sanctions or restrictions on maritime transport in the Middle East, which continued to limit market relief.
The euro lost ground against the dollar. The EUR/USD fell by around 0.3%, settling around 1.121. The uncertainty in France maintained pressure on the single currency, despite the dollar not registering a widespread strengthening against the major currencies.