European markets pushed higher Monday, relieved that centrists remain in control in the European parliament following a bloc-wide election, while the chance of a big merger in the auto industry also sparked confidence.
A positive statement on US-China trade talks from President Donald Trump added to the positive vibe, dealers said. With equity markets in the US and UK closed on Monday, the results of the European elections were in focus on continental European trading floors.
Europe’s mainstream political parties took a hit in elections on Sunday but held off a strong surge by the populist right. “No dramatic upset,” said Berenberg economist Holger Schmieding in a note to clients.
“As the four major pro-European mainstream parties fell merely from 70 percent to 67 percent of the seats, the European Parliament can continue to work smoothly,” he said. While Marine Le Pen’s far-right National Rally finished top in France, pro-EU President Emmanuel Macron’s centrist alliance was close behind.
“The catastrophe that some people predicted for Macron has not taken place and the RN has a significant score, but not a spectacular one,” analyst Zaki Laidi from the Cevipof political institute said. Both the Paris and Milan exchanges benefited from strong gains in Fiat and Renault shares after a merger offer by Italian-US auto giant Fiat Chrysler to France’s Renault on Monday that would create the world’s third largest automaker.