London (AFP) – European stock markets attempted to rebound on Monday despite jitters over the first round of French elections taking place this weekend.
“European markets are in recovery mode, with widespread gains taking shape,” said Shore Markets analyst Joshua Mahony.
“Despite ongoing concerns around this weekend’s French parliamentary election, French stocks are on the rise as investors buy the dip that saw the CAC lose almost 10 percent in a month,” he said, referring to the Paris benchmark stock index CAC 40.
President Emmanuel Macron threw markets into turmoil by calling the snap legislative polls after his centrist party was trounced by the far-right National Rally (RN) in European Parliament elections two weeks ago.
Certain opinion polls showed the RN garnering 35-36 percent of voting intentions for Sunday’s first round, ahead of a left-wing alliance on 27-29.5 percent and Macron’s centrists in third on 19.5-22 percent.
The second round will be held on July 7.
“The positive tone being taken by European markets could yet come into question as we get closer to this potential seismic shift in French politics,” cautioned Mahony.
Investors meanwhile set aside a key survey showing that German business sentiment unexpectedly fell in June, pouring cold water on hopes Europe’s biggest economy is on course for a strong rebound.
The Ifo institute’s confidence barometer, based on a survey of around 9,000 companies, declined to 88.6 points from 89.3 in May. It was lower than a forecast of 89.8 points from analysts surveyed by financial data firm FactSet.
“Today’s results add to the growing stream of indicators sending mixed signals on where the eurozone’s biggest economy is heading,” said Oxford Economics analyst Mateusz Urban.
“Overall, we think that the German economy will struggle to grow in the near-term.”
Elsewhere, Asian equities were mixed on Monday after last week’s poor run. Wall Street was little changed as investors look ahead to the release of key US inflation data, while eyes are also on Japan, with the yen sitting around three-decade lows.
A forecast-topping read on the US services sector provided further evidence that the world’s top economy remained in good health and dealt a blow to hopes for interest rate cuts.
A surge in the tech sector has helped push markets to record or multi-year highs but concerns that the buying has gone too far have set in and profit-taking has weighed on equities in recent weeks.
Shares in Nvidia, which drove the rise to record highs, fell another two percent as trading got underway on Monday.
“Some profit taking seems entirely reasonable given Nvidia’s meteoric rise,” said David Morrison, senior market analyst at Trade Nation, noting the stock was up over 180 percent this year alone. It has lost over 12 percent since setting a record on Thursday.
“But if it continues to lose ground, then there’s a danger of contagion, with selling spreading to other big tech names,” he warned.
He added that this could lead to a deeper and more protracted pull-back for tech stocks.
– Key figures around 1330 GMT –
New York – Dow: UP 0.2 percent at 39,238.06 points
New York – S&P 500: FLAT at 5,463.25
New York – Nasdaq Composite: DOWN 0.2 percent at 17,655.71
London – FTSE 100: UP 0.5 percent at 8,277.50
Paris – CAC 40: UP 0.7 percent at 7,684.04
Frankfurt – DAX: UP 0.6 percent at 18,278.33
EURO STOXX 50: UP 0.7 percent at 4,942.72
Tokyo – Nikkei 225: UP 0.5 percent at 38,804.65 (close)
Hong Kong – Hang Seng Index: FLAT at 18,027.71 (close)
Shanghai – Composite: DOWN 1.2 percent at 2,963.10 (close)
Dollar/yen: DOWN at 159.yen from 159.61 yen on Friday
Euro/dollar: UP at $1.07 from $1.0697
Euro/pound: UP at 84. pence from 84.53 pence
Pound/dollar: UP at $1.26 from $1.2651
West Texas Intermediate: DOWN 0.4 percent at $80.44 per barrel
Brent North Sea Crude: DOWN 0.4 percent at $84.94 per barrel
© 2024 AFP
