Traders digest French election result, causing European stocks to slip.

• Markets reacted to an expected hung parliament in France, causing European stocks to fall at the open on Monday.
• The CAC 40 of France fell 37.9 points to 7,631, and the euro decreased 0.18% in value compared to the dollar, as reported by IG.
• Deutsche Bank strategists predict that achieving political stability in the government is a challenging task, and the likelihood of political paralysis for the next 12 months is high.

European stocks were poised to decline at the start of Monday trading due to the anticipation of a hung parliament in France following a shock victory for a left-wing alliance of political parties.

According to IG, France's EUR fell 37.9 points to 7,631, while the USD was down 0.18%.

The U.K.'s index is predicted to decline by 6 points, as is Germany's, while Italy's is expected to drop 115 points at the start.

The left-wing New Popular Front in France won the most seats in the parliamentary elections, preventing the far-right from achieving an expected surge. Despite this, the coalition did not obtain an absolute majority, prompting markets to consider the possibility of a hung parliament.

The far-right vote was blocked tactically, resulting in a swing in the opposite direction without an overall majority.

The NPF has the most fiscally aggressive program in terms of both spending and taxation, and the market will be suspicious that the prospect of them being in government now or later will bring higher deficits with the associated concerns about debt sustainability and tense relations with Europe, according to a statement made Monday.

"Political paralysis for the next 12 months seems the most likely outcome as the far-left are already discussing wealth taxes and increases on corporate taxes, which may not be market-friendly. Building a stable government appears to be a high bar this morning."

After a landslide victory in the general election last week, the opposition Labour Party unseated the Conservatives, who had been in power for 14 years in Britain.

In corporate news, Britvic has accepted a £3.3 billion ($4.2 billion) takeover bid from Carlsberg, after initially rejecting an offer of 1,200 pence per share.

No major corporate earnings are scheduled for Monday, and there is only German trade data available on the data front.

In the Asia-Pacific region, stocks were mixed on Monday. Meanwhile, in the United States, futures fell as investors anticipated inflation data to provide clues on the market's future performance and the next steps by the Federal Reserve. The consumer price index is set to be released on Thursday, while the producer price index data will be made available on Friday.