European stock markets edged up on Monday as investors digested snap French elections in which a hung parliament appeared the likeliest outcome.
In France, the left was set to emerge as the biggest group in a new parliament, beating out a resurgent far-right in a vote called by President Emmanuel Macron three years ahead of schedule.
The outcome, in which no bloc is expected to have an outright majority, left the country in a “thick fog” of uncertainty, according to one pollster, with the euro dropping around 0.4% from Friday’s levels before clawing back most of the losses.
“The best that can be said is that neither the (left-wing) NFP nor (far-right) National Rally will be able to implement their respective electoral manifestos in full, which would most worry investors fretful about France’s fiscal situation,” Alvin Tan of RBC capital markets said.
While “the worst outcome for the euro has been averted for now,” Tan added, uncertainty remains “and the fiscal balance is unlikely to improve significantly as a result.”
Paris’ CAC 40 benchmark stocks index sank at the open on Monday, but recovered to post modest gains in morning trade, as did Frankfurt’s DAX. The FTSE 100 index in London also inched up.
With AFP
