LONDON (Dow Jones)--European stocks fell sharply Monday, as political uncertainty in France and the Netherlands together with downbeat macro economic data prompted cyclical sectors such as banks, autos and resources to post hefty losses.
Increased uncertainty in Europe's political landscape set the tone Monday, following weekend events in France and the Netherlands. "The risk was always that the European crisis and associated weak economic activity would encourage more extreme politics. This is slowly happening and is something we need to watch going forward," said Jim Reid, strategist at Deutsche Bank.
The first round of the French presidential elections held Sunday confirmed that the two front-runners, President Nicolas Sarkozy and opposition candidate Francois Hollande will go on to the second round. The preliminary results showed Hollande ahead with 28.8% of the votes, compared with Sarkozy's 26.1%.