European stocks rose as key elections held centre stage and investors grew more optimistic about Federal Reserve interest-rate cuts following US economic data that supported the case for easing.
French stocks outperformed, boosting the broader market, as polls showed Marine Le Pen’s National Rally and its allies would fall well short of an absolute majority in Sunday’s French parliamentary election. The UK’s FTSE 100 was up 0.9 per cent, with the Labour Party seen winning elections by a landslide.The gains also follow a strong close in US markets that drove the S&P 500 and Nasdaq 100 to fresh records on Wednesday. The US stock market is closed Thursday for Independence Day.
The pan-European Stoxx 600 Index gained 0.6 per cent, with banks and energy stocks outperforming. The retail sector underperformed. “UK elections should really be a non-issue for markets as, unless there’s a big surprise, it is already priced in,” said Diego Fernandez, chief investment officer at A&G Banco. “In France, markets seem to be quite complacent this week, but we will be ready to buy in any weakness should Sunday’s results bring more declines.
The vote outcome is “marginally positive as tighter ties with Europe will be beneficial to domestic consumption,” said Gilles Guibout, a Paris-based portfolio manager at Axa IM. “It may also open, although very gradually, more opportunities for some stock pickers wanting to diversify in terms of country.”Among single stock movers, Continental AG jumped as the German auto supplier expects slight growth in car production worldwide in the second quarter.
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