NEW YORK: Paris and Milan equities led a retreat across European stock markets Monday (Oct 19) as escalating violence across France and street clashes in Italy's financial capital fuelled concerns over elevated debt.
Most sectors were dragged lower, while there was renewed selling of bonds and the euro.
Wall Street had a better session than Europe, with the tech-rich Nasdaq bouncing back after angst about artificial intelligence hit equities last week. The Dow finished slightly lower.
"It feels like a little bit of an oversold bounce," said Art Hogan of B. Riley Wealth Management.
Whether that rebound continues may depend on tech firm earnings and their message about AI investment as more companies report their third-quarter earnings this week.
"Earnings this week will be crucial to broader risk sentiment. In particular, (Facebook parent) Meta is in focus as the first of the five major hyperscalers to report," said Saxo UK investor strategist Neil Wilson.
In Europe, Paris stocks dropped 1.1 per cent and Milan fell 1.6 per cent.
"European markets reacted anxiously to scenes of severe civil unrest in several countries, highlighted by French President Emmanuel Macron's address acknowledging 'anger and shame' following one of France's worst days of unrest in years," said Patrick Munnelly at Tickmill Group.
Macron on Sunday slammed the "unbridled" violence that erupted alongside cost-of-living demonstrations across the country, as police battled protesters and looters in fresh clashes in Paris.
Nearly 2,400 people were arrested Saturday in unrest that represented some of the worst urban violence in France in years, with almost 1,000 police injured, the interior ministry said.
It comes as the country's lawmakers wrangle over a 2027 budget plan that calls for billions of euros in spending cuts but which keeps France's debt levels extremely high.
Authorities said partial curfews would be enforced from Monday evening to Tuesday morning in a number of cities including Paris, Lille and Lyon, to protect businesses.
In Italy, Prime Minister Giorgia Meloni was holding a security meeting Monday to address the Milan violence, which resembled some of the scenes of chaos and looting in Paris.
Elsewhere, Jakarta's stock market sank more than five per cent Monday, extending Friday's plunge of more than 11 per cent, to close at its lowest level in six years.
That followed a statement from compiler MSCI said it was "no longer appropriate" to maintain the country's emerging-market status, fuelling fears of an exodus of foreign investment.
Among individual companies, Amazon shares jumped around five per cent following a positive report from Morgan Stanley equity analysts.