By Shashwat Chauhan and Amir Orusov (Reuters) -European shares dropped on Monday with French equities being the hardest hit after the country's new Prime Minister Sebastien Lecornu unexpectedly resigned.

Stock markets diverged Monday as a deepening political crisis in France sent Paris into a tailspin while a new Japanese ruling party leader buoyed shares in Tokyo.In Asia, Tokyo surged almost five percent to a record high and the yen sank on bets the new leader of Japan's ruling party will loosen monetary policy to kickstart the economy.