Business

European stocks advance after first round of French elections

Banks lead Iseq higher as wider European banking sector posts good performance led by French lenders

By lunchtime, the Dow was almost nearly flat, with focus moving to labour market data due later in the week. Photograph: Michael Nagle/Bloomberg

Joe Brennan
Mon Jul 1 2024 - 19:20

European stocks rose on Monday, with French shares leading the charge after the far-right National Rally (RN) party scored historic gains in the first round of parliamentary elections, but by a smaller margin than what some opinion polls had suggested.

France’s blue-chip CAC 40 index jumped 1.1 per cent to lead gains among regional markets. That helped the region-wide Stoxx 600 index rise 0.3 per cent, snapping four consecutive sessions of losses.

The RN and allies had 33 per cent of the vote, followed by a left-wing bloc with 28 per cent and President Emmanuel Macron’s centrists with just 20 per cent. The final result will depend on days of horse-trading before the July 7th run-off.

DUBLIN

The Iseq All-Share index edged 0.1 per higher to 9,325.72. Banking stocks advanced, with AIB adding 1.5 per cent to €5.01 and Bank of Ireland gaining 0.5 per cent to €9.82 as the wider European banking sector put in a good performance, led by French lenders.

READ MORE

Insurer FBD was also in demand, rising 2.8 per cent to €13.10, again, tracking the wider European insurance sector.

Jack Chambers: what to expect from the youngest Minister for Finance since Michael Collins

Listen | 35:34

Smurfit Kappa ended the session unchanged at €41.60 as it marked its second-last day on the Irish market before its imminent merger with US peer WestRock.

LONDON

London’s FTSE 100 began the week on a steady note on Monday, supported by housebuilders and precious metal miners, while investors remained cautious in advance of Britain’s July 4 election.

The blue-chip FTSE 100 was flat, just snapping a four-session losing streak.

Opinion polls suggest Labour Party leader Keir Starmer is set to replace Conservative Rishi Sunak as prime minister following Thursday’s parliamentary elections.

“Markets like stability. The polls suggest that we are not in for any surprise, but it’s the kind of change which has been poked, prodded and priced in,” said Danni Hewson, head of financial analysis at AJ Bell.

Housebuilders led sectoral gains, up 1 per cent after a Nationwide report showed British house prices made a small gain in June from May but the impact of higher interest rates still weighed on the property market.

Precious metal miners and oil stocks edged up over 1 per cent each, tracking higher gold and oil prices.

Anglo American slipped 2.8 per cent, and was among the top losers on the FTSE 100, after the miner said it had suspended production at its Australian metallurgical coal mine after an underground fire there on Saturday.

EUROPE

The European banks’ index housing France’s main lenders including BNP Paribas, Société Générale and Credit Agricole, advanced 2.8 per cent, clocking its best day in over a year.

French assets have taken a battering since Macron called a snap election last month. The CAC 40 closed at its weakest level in more than five months on Friday on concerns over France’s fiscal discipline under the new government.

Another set of data showed inflation fell in five important German states in June, suggesting that national inflation could decline this month.

The European Central Bank (ECB) cut interest rates from record highs early in June and signalled further moves ahead as inflation eases, but it did not commit to the timing of its next cut. Traders are pricing in a near 50 per cent chance of another 0.25 percentage point rate cut by September.

Markets will now await ECB president Christine Lagarde’s remarks after market close and euro zone inflation data on Tuesday.

Technology shares lagged with a 0.8 per cent fall, with German IT systems provider Bechtle falling 5.9 per cent on a rating downgrade from Exane BNP Paribas.

NEW YORK

Megacap stocks lifted the tech-heavy Nasdaq in volatile trading at lunchtime, while the S&P 500 and the Dow were nearly flat, with focus moving to labour market data due later in the week for cues on the timing of interest rate cuts this year.

Apple, Microsoft and Amazon.com rose and were the biggest boosts to the Nasdaq.

Semiconductor stocks such as Advanced Micro Devices, Arm Holdings and Micron Technology fell, pulling the Philadelphia SE Semiconductor index to a near one-week low.

Spirit AeroSystems gained following Boeing’s deal to buy back the fuselage supplier for $4.7 billion in stock. Boeing’s shares rose.

— Additional reporting: Reuters

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times

LATEST STORIES