Title: European shares edge higher, France lags on election jitters
Jun 20, 2022 05:30AM ET
European stocks rose slightly Monday after a sharp sell-off last week on recession fears, while French shares lagged their peers after President Emmanuel Macron lost an absolute majority in parliamentary elections.
The pan-European STOXX 600 index rose 0.4%, with battered banking, travel and retail stocks leading the gains. A U.S. holiday also likely made for choppy trading.
The benchmark index lost 4.6% last week in a global selloff fueled by fears that aggressive interest rate hikes by the Federal Reserve and other major central banks could trigger a recession.
France's benchmark CAC 40 index rose 0.1%, lagging other major regional indexes, after Macron's centrist Ensemble alliance won the most seats in the National Assembly over the weekend but fell well short of the absolute majority needed to take control of parliament.
The country's major banks, including Societe Generale, BNP Paribas, and Credit Agricole, slipped in morning trading.
"It means there will probably be less structural reform, but we are already underweight in Europe and it doesn't change our stance significantly," said Willem Sels, global chief investment officer, private banking and wealth management at HSBC.
The STOXX 600 is down nearly 17% so far this year as a cocktail of worries—from rising inflation to a slowing Chinese economy to a cost-of-living crisis in the U.K.—dampens risk appetite.
"It's hard to say whether we've hit bottom or not. "We will continue to see some volatility as we don't think inflation will come down until the end of this year," Sels added.
Data showed that German producer prices rose by more than the expected 33.6% year-on-year in May.
The European index for building and construction materials fell 2.1% after Irish building insulation specialist Kingspan said sentiment in most end markets had deteriorated over the past two months.