Borrowing costs for the French government on Tuesday climbed to their highest level since last November following President Emmanuel Macron's surprise decision to call a parliamentary election.
At one stage, the yield on 10-year French bonds - that is the return the French government has to pay buyers of its debt - was up as much as 10 basis points at 3.2%, the Telegraph reported.
Markets analyst Tina Teng told Euronews: "Basically, investors are fleeing French markets. The bond yields rise implies sell off in French government bonds amid uncertainties, coupled with the drop in its stock markets, led by banking stocks."
Mr Macron announced his plans for parliamentary elections after the hard-right National Party headed by Marine Le Pen won 32% of the French vote in the European Parliament elections.
That was more than double that won by the president's own Renaissance party, which took 15.4% of the vote.
Vincent Juvyns, global market strategist at JP Morgan, told the Telegraph: "The surprise decision to call for snap elections adds to uncertainty, particularly as France could face an EU procedure for excessive deficits later on this month.
"Already this morning one can see the euro trading lower, but I expect the spread between France's sovereign debt and Germany to grow further."
