PARIS (Reuters) – European stock markets, including the CAC 40, opened sharply higher on Monday after four consecutive sessions of decline, as investors expressed relief at the results of the first round of French legislative elections.
In Paris, the CAC 40 jumped 2.51% to 7,667 points around 07:05 GMT, led by the banks which had suffered first from the uncertainty raised by the announcement of the calling of early legislative elections.
In Frankfurt, the Dax advanced 1.02%, compared to 0.62% for the FTSE in London.
The pan-European FTSEurofirst 300 index takes 0.94%, the EuroStoxx 50 1.69% and the Stoxx 600 1.06%.
New York index futures suggest Wall Street opening higher, with the Dow Jones gaining 0.24%, compared to 0.34% for the Standard & Poor’s 500 and 0.43% for the Nasdaq.
According to the final results, the National Rally (RN) and its allies Les Républicains (LR) obtained 33.15% of the votes in the first round of the legislative elections in France, ahead of the New Popular Front (NFP), credited with 27.99%, and the presidential list “Ensemble” (20.4%).
The RN score was less significant than feared by investors, explaining the rebound in the indices at the opening.
“In terms of market reactions, last night’s vote is not the worst-case scenario (anticipated majority of the RN or the NFP) of the first round, but the least worst,” summarizes John Plassard, director at Mirabaud.
The spread between 10-year French sovereign securities and their German counterparts fell to 74 bp, compared to a peak of 84 bp on Friday.
However, political uncertainty is here to stay, notes Bruno Cavalier, chief economist at Oddo BHF, and French assets could remain volatile.
Several indicators are expected on Monday, including the final PMI indicators for June for the manufacturing sector, as well as inflation in Germany for June.
The indicator will be closely monitored as it could help to predict the trend in eurozone inflation to be published on Tuesday, a key indicator for conducting monetary policy.
In terms of values, Atos rose 21.7% after announcing on Sunday that it had reached an agreement on the terms of its financial restructuring, which will place it in the hands of its creditors.
French banks are progressing after the results of the legislative elections: Société Générale, Crédit Agricole and BNP Paribas take between 5% and 7%.
(Written by Corentin Chappron, edited by Blandine Hénault)
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