French markets tumble as protests deepen political crisis

French markets tumbled Monday as widespread protests across France worsened the country's political crisis, sending stocks, bonds, and the euro lower amid investor concern over the government's ability to reduce its large deficit. The unrest, which included thousands of arrests and looting over high prices and declining public services, pushed France's 10-year bond yield up 13 basis points to 4.9%, nearing its highest level since 2002. The CAC 40 index fell 1.5%, with major banks like BNP Paribas and Societe Generale dropping 3% each, while the cost of insuring French debt also rose. Prime Minister Sebastien Lecornu did not rule out declaring a state of emergency, and Moody's will review France's credit rating on Friday, potentially leading to a downgrade. Investors are watching Italy as a potential spillover risk, while analysts note that hedge funds' growing role is making the market more vulnerable.