Source: Sharecast
Th pan-regional Stoxx 600 index was up 0.32% in early deals, with France's CAC 40 rising 0.60%.
Bayrou, who called the motion, was widely expected to lose the vote as rivals from both left and right combined to oppose 2026 austerity budget plans to tackle the country’s massive deficit.
French President Emmanuel Macron will now have to appoint the nation's fifth prime minister in less than two years.
"The issue is that President Macron is running out of candidates to be PM, which is why there is a growing call from his political rivals to call new legislative elections," said XTB research director Kathleen Brooks.
"It looks like Macron will resist such calls now, and a new PM will be elected. The market will be looking to see if a new government can make some progress on government cuts, potentially by ringfencing public holidays and adding more taxes for the wealthiest citizens.£
"Either way, France has Europe’s widest budget deficit, and Bayrou’s successor is still left with a growing pile of debt to sort out. Bloomberg analysis shows that if France cannot make the necessary cuts, then French national debt could rise by 10% in the next 5 years to 125% of GDP."
Brooks noted that French government debt is the worst performer in the 10-year category and is the second worst performer in Europe and the US in the 30-year category this year with yields rising "for unwelcomed reasons".
In equity markets, London-listed Anglo American jumped 5.8% after it confirmed its merger with Canada’s Teck Resources to create one of the world’s top five copper producers. Frankfurt-listed Teck shares jumped more than 21%.
Reporting by Frank Prenesti for Sharecast.com