European stocks retreat as France violence spreads

Paris and Milan equities led a retreat across European stock markets Monday 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.

Tech stocks led a rebound on Wall Street on Monday, with the Nasdaq Composite climbing 1.7 percent.

"There was no mistaking that last week was a tough week for the semiconductor and AI trade," said Briefing.com analyst Patrick O'Hare.

Concerns about rising investment costs and whether the vast sums pumped into the sector would see a return dominated sentiment, with investors dumping the stocks and bonds of a company providing computing power for AI firms.

"Staying true to form, though, there is a buy-the-dip bid in those stocks this morning," O'Hare added.

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 percent and Milan fell 1.6 percent.

"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.

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.