European stocks rise as political tension eased and on M&A news
European stocks were higher on Monday, as the choppy political waters in Spain and Italy calmed and as traders took heart from news of potential corporate mergers and acquisitions.
Shares of French bank Societe Generale SA and air carrier Air France-KLM were on the rise on reports of M&A deals in the cards.
The Stoxx Europe 600 Index was up 0.5%. All sectors rose, led by the utility and financial groups. On Friday, the benchmark rose 1%, trimming the loss for the week to 1.1%. Spain’s IBEX 35 was the best performer of the major bourses, up by 2.1%, as a new government took over in Madrid. Italy’s FTSE MIB index was up 0.5% adding to a jump of 1.5% on Friday, when a populist coalition officially entered power. Germany’s DAX 30 index on Monday trimmed its gain to 0.2% and France’s CAC 40 index was up 0.4%. In London, the FTSE 100 rose 0.9%. The euro moved up to $1.1727 from $1.1659 late Friday in New York.
Calm was returning to markets in Italy, where a political crisis that rocked global markets was resolved on Friday with the swearing-in of a new government. Populist parties the 5 Star Movement and the League have formed a coalition administration.
Meanwhile, Spain also got a new government after a period of upheaval. Socialist Party leader Pedro Sánchez was sworn in as prime minister on Saturday after Mariano Rajoy was ousted in a parliamentary vote of no confidence. At the same time, Madrid ended direct rule in Catalonia, letting go of controls put in to resist a push for the region to selfgovern.
Investors may turn their focus back to trade tensions, after weekend trade talks between the U.S. and China ended with little sign of progress. The world’s two largest economies moved closer to imposing tit-for-tat tariffs on one another.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.