French election shock hits stocks and the euro

The decision by French President Emmanuel Macron to call a snap election after losing to the far right in a vote for European lawmakers roiled markets and the euro Monday.

Big gains for the far right in the French election could force Macron to govern with a hostile parliament, making it harder for his centrist administration to pursue its policy agenda and raising doubts about its ability to put government finances on a more sustainable footing.

France’s CAC 40 index, which represents 40 of the biggest companies listed in Paris, fell 1.8% by 7.06 a.m. ET, with banks among the biggest losers. Europe’s benchmark Stoxx 600 index was trading 0.6% down on the day by the same time.