Europe close: Stocks give up early gains

8th Jul 2024 16:13

(Sharecast News) - Most European bourses ended Monday's session little changed, but in the red, as investors digested the political stalemate in France, where no party managed to garner a majority in the second round of elections to the National Assembly at the weekend.

France's Cac-40 on the other hand finished noticeably lower, while Milan's FTSE Mib edged up 0.17% to 34,046.54.

The pan-European Stoxx 600 meanwhile was down by 0.03% to 516.43 and Spain's Ibex 35 by 0.01% to 11,022.10.

Investors had initially bid shares in Paris higher, with sentiment buoyed by a poor result for the far-right National Rally and a better-than-expected one for president Emmanuel Macron's centrists.

However, the first-place result for the left-wing alliance, New Popular Front, did come as a shock to some.

"While it began the week in a good mood, the FTSE 100, along with other European markets, has seen its gains slip away," said IG chief market analyst Chris Beauchamp.

"While the lack of a clear immediate winner from France's elections provided a short boost this morning, that optimism has been hard to sustain. France's budget problems still need to be solved, and Sunday's result doesn't provide much hope that a resolution can be found quickly."

Analysts at JP Morgan were in a similar frame of mind, telling clients: "The main takeaway at this stage is that the house is very split. A hung parliament has no precedent in the current institutional regime, and it is unclear how this political sequence resolves in the short term."

In equity news, Carlsberg shares rose as the Danish brewing giant said its sweetened £3.3bn offer for Robinsons barley water maker Britvic had been accepted. Shares in the takeover target also rose on the news.

Ocado was up as the online grocery group said it was planning to build a third customer fulfilment centre in Japan as part of its ongoing partnership with Japanese peer AEON.

Shares in Delivery Hero slumped 7% after the German online food takeaway firm said it may face a fine of more than €400m due to competition law breaches.