EUROPEAN shares were muted on Monday as investors mulled chances of a hung parliament in France after the left alliance’s unexpected advance in the election, while weak energy shares were a drag.
The pan-European Stoxx 600 index ended flat at 516.43 points. The oil and gas sector was the biggest drag on the benchmark index, down 1.1 per cent, as crude prices took a hit.
French stocks gave up early gains to shed 0.6 per cent on the prospect of taxing negotiations starting Monday to form a government, after a surprise left-wing surge blocked the far right’s quest to win the snap election called by President Emmanuel Macron.
“A pact of coordination between the centre and the left was formed to reduce the chances of the latter. Arguably, this pact has been successful, but the outcome looks like a classic case of unintended consequences,” said Jamie Ross, portfolio manager, European Equities at Janus Henderson Investors.
“If political wrangling reaches complete deadlock, some sort of a technocratic government would be the likely outcome. This would be a benign outcome for markets.”
Shares of BNP Paribas, France’s largest bank, lost 1.7 per cent while SocGen fell 1.2 per cent.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Data from Germany showed exports fell more than expected in May due to weak demand from China, the US and European countries. Market attention will shift to US and German inflation data due later this week that will shape the narrative for the path of future interest rate cuts.
Friday’s US jobs report bolstered the case for a September rate cut from the Federal Reserve, lifting chances of an easing to 77 per cent.
Among individual movers, Grifols jumped 9.7 per cent after the Grifols family and Canadian fund Brookfield agreed to launch a joint takeover bid for the Spanish drugmaker with plans to delist it.
UK’s Britvic climbed 4.4 per cent as the soft drinks maker said it has agreed to be taken over by Carlsberg for 3.3 billion pounds (S$5.7 billion) after the Danish brewer sweetened its bid.
Shares of Carlsberg also rose 3.3 per cent.
Delivery Hero dropped 7.1 per cent to the bottom of the Stoxx 600 after it said it may face a fine exceeding 400 million euros from Brussels due to antitrust violations.
ASML shares briefly crossed the 1,000-euro mark for the first time following positive research notes on top customer TSMC ahead of both companies’ earnings reports. It ended 0.5 per cent higher. REUTERS
