French markets, euro slide as government collapses

LONDON, Oct 6 (Reuters) - French stocks and bond prices tumbled, while the euro dropped on Monday, following the resignation of Prime Minister Sebastien Lecornu in the face of mounting pressure from leftist lawmakers over his budget plans, thrusting the euro zone's second-largest economy deeper into crisis.

Paris' CAC 40 .FCHI dropped 1.5%, making it the worst-performing index in Europe, as banking shares came under heavy fire, leaving BNP Paribas BNPP.PA, Societe Generale SOGN.PA and Credit Agricole CAGR.PA down 4-5%.

The euro EUR=EBS slid 0.7% on the day to $1.1665.

French bonds came under pressure, pushing yields on benchmark 10-year FR10YT=RR debt up 7.4 basis points to 3.585%. That left the premium investors demand to hold French debt, rather than triple-A rated German paper DE10FR10=RR, at 86.58 bps, the most since January this year.

This spread hit a 2012 high of 90 bps in last November.