Investors digest German election results
LONDON – European stocks are expected to rise on Monday, with German election results removing a key market risk for investors in the region.
The German DAX is expected to rise 107 points to 15,527, while the UK FTSE 100 is expected to rise 59 points to 709 and the French CAC 40 is expected to rise 43 points to 6,675, according to IG.
In Germany, preliminary results on Monday morning showed the center-left Social Democratic Party winning the largest share of the vote with 25.8%. Angela Merkel’s right-wing bloc of the Christian Democratic Union and the Christian Social Union obtained 24.1% of the vote.
But coalition negotiations, which could start on Monday, are expected to take weeks, if not months.
Market watchers noted that the poor performance of Germany’s far-left Die Linke party meant that an all-left coalition in the Bundestag was now out of the question.
Holger Schmieding, chief economist at Berenberg Bank, said in a research note that a pact between the SPD, Die Linke and the Greens may have “hampered trend growth through tax hikes, reform reversals and excessive regulations “.
Elsewhere on Monday, European Central Bank President Christine Lagarde will make a statement to a European Parliament committee, and Britain’s opposition Labor Party will resume its annual conference in Brighton.
There are no major earnings reports or economic data releases on Monday.
UK energy stocks like BP will be closely watched, after panic buying over the weekend amid a shortage of truck drivers that has left many service stations in Britain without fuel.
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