European stocks extend slide as French unrest rattles investors

Published Wed, Oct 21, 2026 · 06:13 AM

[BENGALURU] European shares ended just a touch lower on Tuesday (Oct 20), as violent protests in France kept risk appetite in check and hammered equities in the euro zone’s second-biggest economy.

The protests, which have intensified pressure on a country already grappling with soft economic growth and ballooning government debt, sent France’s benchmark CAC 40 index 0.38 per cent lower.

The pan-European Stoxx 600 index dipped 0.14 per cent to 638.64 points after slipping 0.8 per cent in the previous session.

Investors weary of elevated oil prices and high government bond yields have relied on robust earnings to pluck the Stoxx 600 out of the narrow range it has been stuck in over the past month.

“You can have a lot of headwinds but earnings growth can still drive the day. The current season has been one of the best quarters for earnings per share growth in Europe in many years,” said Burns McKinney, managing director and senior portfolio manager at NFJ Investment Group.

But the turmoil in France has added another risk, especially as presidential elections are due in six months.

“It’s tough for investors to get particularly emboldened by Europe now,” said Neil Wilson, investor strategist at Saxo UK.

“How much exposure do you want to Europe right now when you’re not really sure what sort of policies are going to be pursued by government over the next few years, and France being the focal point for that?“

Several major European sectors were trading lower, with industrials leading declines, dragged down by ABB’s 5 per cent drop as nervousness about the sustainability of artificial intelligence investments weighed on the Swiss engineering company, which is a major supplier to data centres.

French cloud operator OVHcloud jumped 18 per cent to a near one-month high after reporting its first positive levered free cash flow since its 2021 listing.

Comet Holding jumped 4.7 per cent following an increase in the electronic equipment maker’s third-quarter sales due to expansion of data centres and AI infrastructure.

Schneider Electric fell 3.3 per cent after the French electrical equipment maker raised 6 billion euros (US$6.74 billion) in an accelerated bookbuild, a fast share sale to institutional investors.

Meanwhile, data showed that British workers saw another modest rise in the pace of pay growth in the three months ended August, which could bolster the case for a Bank of England interest rate hike next month. The FTSE 100 declined 0.29 per cent.

The European Central Bank is expected to remain on hold this month, while traders see an 85 per cent chance of a hike in December, according to data compiled by LSEG. REUTERS