European shares rebound after French election upset

European shares rebounded on Monday, overcoming initial losses following France’s surprising election results, which led to a hung parliament with a leftist alliance taking the lead.

The pan-European STOXX 600 index rose by 0.4 per cent, driven by a 0.8 per cent rise in construction and materials shares. However, the oil, gas, and mining sectors declined by 0.6 per cent each due to lower commodity prices.

Market strategist Michael Field from Morningstar noted that, despite initial fears, the left-wing alliance’s victory alleviated concerns about a potential right-wing government. French stocks, including BNP Paribas and SocGen, showed resilience, rising by 0.4 per cent.

In Germany, exports fell more than expected in May due to weaker demand from major markets. Investors are now focused on upcoming US and German consumer price index data, which will influence future interest rate decisions.

Optimism was bolstered by a positive US jobs report, raising the probability of a September rate cut by the Federal Reserve to 77 per cent.

Key movers included Ubisoft, which surged 6.6 per cent after an upgrade from Jefferies, and Ocado, which jumped 5.8 per cent after announcing an expanded partnership with Japan’s Aeon.

UK-based Britvic climbed 4.7 per cent following a buyout agreement with Carlsberg, whose shares also rose by 4.0 per cent. Conversely, Delivery Hero fell 11.2 per cent due to potential antitrust fines from Brussels.

Attribution: Reuters.