A fast-moving weekend of “political intrigue” in France and Germany boosted the euro and helped push European stocks higher, dealers said.
Paris closed 0.6% higher at 4,529.58 points, but most of the gains in Frankfurt slid away although the Bundesbank added to the good news by saying the German economy will pick up speed again in the final months of the year following a summer slowdown.
The DAX 30 closed with a gain of 0.2% at 10,685.13 points.
London, meanwhile, edged up 0.03% at 6,777.96 points as investors scrutinised a speech by Prime Minister Theresa May for clues about economic policy and the British government’s budget update due this Wednesday.
The Euro Stoxx 50 ended up 0.4% at 3,032.12 points.
German Chancellor Angela Merkel declared on Sunday that she would seek a fourth term in elections next year in the face of looming threats at home and abroad, ending months of feverish speculation.
And the shock winner of the first round of France’s right-wing presidential primary was conservative ex-premier Francois Fillon, who is tipped to face — and beat — far-right leader Marine Le Pen in the presidential run-off next May.
Former president Nicolas Sarkozy crashed out.
“An empty economic calendar allowed some eurozone political intrigue to grip the markets this Monday, the region finally (if briefly) taking its turn in the spotlight following the more attention-grabbing moves made in the UK and US,” noted Spreadex analyst Connor Campbell.
“The confirmation that Angela Merkel is set to run for a fourth term as German chancellor in next year’s election, combined with a Marine Le Pen-damaging victory for Francois Fillon in the first round of France’s right-wing primaries, has given life to the euro. “The fact that this political news suggests stability in a region standing on the precipice of potential chaos has also helped out the eurozone indices,” Campbell added.
“Former French President Sarkozy was knocked out of the first round primary to find the next presidential candidate, which can be viewed as another knock for the establishment,” added Simon Smith, chief economist at trading firm FX Pro.
“Politics will not slip far down the agenda, with the Italian constitutional referendum approaching next week, which the prime minister has stacked his political career on.”
Oil prices advanced after Russia and Iran expressed optimism a deal can be agreed between Opec and other major producers on cutting output later this month.
Wall Street pushed higher yesterday, with oil-related stocks helping push the Dow 0.2% higher approaching midday.
The Paris Stock Exchange, operated by Euronext, in La Defense business district of Paris. The CAC index closed 0.6% higher at 4,529.58 points yesterday.
