Stocks in the US and Europe gyrated on Monday after France’s far-right and left-wing parties said they will vote for a no-confidence motion against prime minister Michel Barnier, a move that may cause the French government to collapse later this week.
French equities fell about 0.6 per cent while broader European shares pulled back on the news, last up about 0.3 per cent on the day.
Wall Street stocks were mixed on Monday, boosted by technology stocks, while investor focus remained on a slew of economic data this week. The Dow Jones Industrial Average fell 0.32 per cent to 44,768, the S&P 500 rose 0.2 per cent to 6,045 and the Nasdaq Composite rose about 1 per cent to 19,408.
The euro itself gained little respite, down 1 per cent to $1.0468, as the dollar got a boost during the weekend from US president-elect Donald Trump, who warned Brics emerging nations against trying to replace the greenback with any other currency.
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Dublin
Home builders Cairn and Glenveagh were the standout performers, rising 3.4 per cent and 2.5 per cent restively on the first day of trading after the Irish general election which is expected to put the Coalition back into power. Both companies benefit strong from the Government’s various help to buy schemes. Most of the big Irish names ended the session in marginally positive territory. Iseq heavyweight Ryanair was up almost 1 per cent after analysts at investment bank Barclays predicted short-haul air travel and short-haul airlines could get a boost from a peace deal in Ukraine. AIB and Bank of Ireland also turned in a positive performance, closing up 1.3 per cent and 0.3 per cent respectively.
Europe
The euro has lost some 14 per cent in value over the last three months, in part because of concern that the health of the euro zone economy might require the European Central Bank to deliver deeper interest-rate cuts than previously expected.
France’s National Rally (RN) had given prime minister Michel Barnier until Monday to yield to the far-right party’s demands for concessions in his proposed budget or face the possibility of it backing a no-confidence motion.
Shares in France’s biggest lenders, who have a lot of exposure to domestic French debt, also changed course, with BNP Paribas, Societe Generale and Credit Agricole falling 2-3 per cent.
In June, the premium, or spread that investors demand to hold French rather than German sovereign bonds – widely considered the benchmark for Europe – burst above 80 basis points for the first time since the 2012 euro zone debt crisis.
London
The UK’s FTSE 100 touched a six-week closing high on Monday, extending November’s modest gains, as a slide in sterling supported shares of international firms.
The blue-chip FTSE 100 rose 0.3 per cent to its strongest close since October 21st. The index clocked a 2.2 per cent gain in November.
The pound slid 0.8 per cent against the dollar, helping big firms such as Unilever, HSBC and Anglo American which draw a large part of their revenue in dollars.
British home builders Vistry Group and Persimmon fell 3.9 per cent and 1.3 per cent after brokerage RBC cut the rating on their stocks to “underperform” from “perform”.
New York
The S&P 500 and the Nasdaq gained on Monday, with the benchmark index briefly hitting an all-time high boosted by technology stocks, while investor focus remained on a slew of economic data this week.
The week’s centrepiece would be the November nonfarm payrolls report due on Friday, a key metric in also gauging the state of the labour market.
Jay Woods, chief global strategist at Freedom Capital Markets, noted that an in-line reading should keep the Federal Reserve on track to cut interest rates by 25-basis-points when it meets later this month.
Most megacap and growth stocks were higher with Tesla leading gains, up 2.2 per cent, after Stifel raised its target price on the stock to $411 from $287.
Although eight of the 11 major S&P sectors were trading lower, an about 1 per cent advance each in information technology, consumer discretionary and communication services kept the benchmark index in the green. – Additional reporting by Reuters
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