Stoxx 600, FTSE, DAX, CAC, France

LONDON — European stocks ticked lower on Tuesday, with all eyes on France after the resignation of Prime Minister Sebastien Lecornu plunged the country into a fresh political crisis.

The pan-European Stoxx 600 index was down 0.2% by 8:36 a.m. in London (3:36 a.m. ET), with most sectors and major bourses in the red.

France is firmly in focus this week following Lecornu’s surprise departure on Monday, which came just one day after he had appointed a new government cabinet and only 27 days into the job.

In a surprise twist on Monday evening, French President Emmanuel Macron gave Lecornu another 48 hours for “final discussions” with rival parties to try to break the impasse. Lecornu wrote on X that he will report to the president on Wednesday evening on any potential breakthrough “so that he can draw all the necessary conclusions.”

Markets were rattled by Lecornu’s resignation; France’s CAC 40 index closed lower by around 1.3% on Monday, having pared some earlier losses. French banks were among those leading the declines, with Societe Generale, BNP Paribas and Credit Agricole all down more than 3% when markets closed.

Several French stocks rebounded into positive territory on Tuesday, however. Carmaker Renault was up 2.8% in early trading, while Gucci-owner Kering advanced 2.48%, Christian Dior added 2.4% and luxury giant LVMH rose 1.8%

Spanish energy utility Naturgy fell 3.11%, meanwhile, after it announced it was selling about 3.5% of its shares as it looks to join the MSCI indexes.

Elsewhere, a data print on German factory orders majorly disappointed markets. In August, new orders in the manufacturing sector fell by 0.8% from the previous month, according to figures from Germany’s Federal Statistical Office. Analysts polled by Reuters had been expecting a monthly increase of 1.1%.

In corporate news, British oil giant Shell said Tuesday that it expects trading in its gas division to be “significantly higher” in the third quarter of this year than the second quarter. However, the firm also said in an update that it was pricing in a $600 million hit from the cancellation of its Rotterdam biofuels project. Shares of Shell were up 1.7% on Tuesday.

U.S. stock futures were slightly lower Tuesday night after Wall Street kicked off the new trading week with fresh highs, fueled by enthusiasm about a potential acceleration in mergers and acquisitions activity and an anticipated Federal Reserve rate cut.

The record-breaking market comes as investors appear to brush off concerns tied to the current U.S. government shutdown that is now on its second week.

The shutdown has delayed the release of key economic data, such as the September jobs report that was expected Friday, and therefore lessened the amount of information available for the Fed ahead of its next interest rate decision.

A longer shutdown, coupled with this data blackout, comes at a time when risks to the labor market and inflation remain top-of-mind.

In Asia Pacific markets overnight, Japan’s Nikkei 225 hit a record high Tuesday for the second straight session, lifted by the tech rally on Wall Street.

— CNBC’s Pia Singh contributed to this market report.