Xin Hua Cai Jing·2025-10-07 00:51Core Points - The Paris stock market experienced a significant decline due to political turmoil in France, with the CAC40 index dropping as much as 2.1% before closing down 1.36%, falling below the 8000-point mark [1] - The resignation of Prime Minister Le Cornu, which occurred shortly after the announcement of a new government, triggered widespread criticism and heightened political tensions, marking the shortest tenure for a Prime Minister in the history of the Fifth Republic [1] - The financial sector was particularly hard hit, with major banks like Société Générale, Crédit Agricole, and BNP Paribas seeing declines of 4.23%, 3.43%, and 3.21% respectively [1] Market Analysis - Analysts noted that French bank stocks are highly sensitive to changes in domestic debt financing costs, with a notable increase in sovereign bond yields putting pressure on these stocks [1] - Following Le Cornu's resignation, the yield on France's 10-year government bonds rose from 3.51% to 3.61%, before settling at 3.57% [1] - The spread between French and German 10-year government bond yields widened to 0.85 percentage points, significantly higher than the approximately 0.5 percentage points observed before President Macron's planned dissolution of the National Assembly in June 2024 [1][2]