French stocks traded lower on Monday, with banks leading losses after Moodys unexpectedly downgraded Frances credit rating to Aa3 from Aa2.
Political fragmentation means there is a very low probability of reducing the ballooning fiscal deficit, the ratings agency said just hours after President Emmanuel Macron named centrist François Bayrou as his fourth prime minister this year, following the collapse of Michel Barniers administration.
Investors were also reacting to a closely watched business survey by S&P Global that showed Frances services sector shrank further in December, although the pace of contraction eased.
The benchmark CAC 40 was down 36 points, or half a percent, at 7,374 after losing 0.2 percent in the previous session.
Mass-media conglomerate Vivendi soared 36 percent as its newly spun-off entities Canal+, Havas and Louis Hachette Group started trading in London, Amsterdam and Paris respectively.