LONDON — European stocks are expected to open mixed on Tuesday, with all eyes on France after the resignation of Prime Minister Sebastien Lecornu plunged the country into a fresh political crisis.
The U.K.’s FTSE index is expected to open slightly lower, Germany’s DAX 0.2% higher, France’s CAC 40 up 0.13% and Italy’s FTSE MIB 0.1% lower, according to data from IG.
France is firmly in focus this week following Lecornu’s surprise departure on Monday, which came just one day after he had appointed a new government cabinet and only 27 days into the job.
In a surprise twist on Monday evening, French President Emmanuel Macron gave Lecornu another 48 hours for “final discussions” with rival parties to try to break the impasse. Lecornu wrote on X that he will report to the president on Wednesday evening on any potential breakthrough “so that he can draw all the necessary conclusions.”
Markets were rattled by Lecornu’s resignation; France’s CAC 40 index closed lower by around 1.3% on Monday, having pared some earlier losses. French banks were among those leading the declines, with Societe Generale, BNP Paribas and Credit Agricole all down more than 3% when markets closed.
U.S. stock futures were slightly lower Tuesday night after Wall Street kicked off the new trading week with fresh highs, fueled by enthusiasm about a potential acceleration in mergers and acquisitions activity and an anticipated Federal Reserve rate cut.
The record-breaking market comes as investors appear to brush off concerns tied to the current U.S. government shutdown that is now on its second week.
The shutdown has delayed the release of key economic data, such as the September jobs report that was expected Friday, and therefore lessened the amount of information available for the Fed ahead of its next interest rate decision.
A longer shutdown, coupled with this data blackout, comes at a time when risks to the labor market and inflation remain top-of-mind.
In Asia Pacific markets overnight, Japan’s Nikkei 225 hit a record high Tuesday for the second straight session, lifted by the tech rally on Wall Street.
European data releases on Tuesday include Germany factory orders, U.K. house price data and France trade figures.
— CNBC’s Pia Singh contributed to this market report.
