European shares end lower; German stocks rise on election relief

European shares rise on German election relief, oil surge
European shares rise on German election relief, oil surge   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Sruthi Shankar and Shreyashi Sanyal</p> <p> -Europe’s <span class="caps">STOXX</span> 600 index ended lower on Monday as declines in tech stocks offset gains in banks and energy, while German shares hit 10-day highs as the federal election outcome reduced the chances of a left-wing coalition forming a government. </p> <p>Germany’s blue-chip <span class="caps">DAX</span> rose 0.3%, leading gains among regional indexes, while the pan-European <span class="caps">STOXX</span> 600 index fell 0.2%. </p> <p>Germany’s centre-left Social Democrats were set to start trying to form a government after they narrowly won their first national election since 2005, saying they would seek to form a coalition with the Greens and the liberal Free Democrats by Christmas to take over from Angela Merkel’s conservatives.</p> <p>Investors were relieved that hard-left Linke party fell below the 5% threshold needed to enter parliament.</p> <p>“The left wing Die Linke party’s poor election showing appears to have ruled out a left wing alliance, and its likely negative impact on German stocks,” according to BlackRock Investment Institute. </p> <p>“We see the election outcome eventually resulting in a moderate left or right leaning government.”</p> <p>German real estate company Vonovia, aircraft engine maker <span class="caps">MTU</span> Aero Engines and renewables company Siemens Energy were the top gainers on the <span class="caps">DAX</span>. </p> <p>The oil & gas index climbed 2.8% to hit a three-month high, while banks added 2.8%. [O/R]</p> <p>Oil majors TotalEnergies, Royal Dutch Shell and BP rose between 3.4% and 4.8%, providing the biggest boost to the <span class="caps">STOXX</span> 600.</p> <p>“Concerns over the possibility that tech stocks have been pumped up by easy money brings a potential shift towards pro-cyclical laggard which often rise as yields improve,” said from Joshua Mahony, senior market analyst at IG.</p> <p>While worries about hawkish central bank policies, fallout from China Evergrande’s financial troubles and inflation have weighed on sentiment, investors are hoping that vaccination will drive a steady global recovery.</p> <p>The <span class="caps">STOXX</span> 600 index has climbed 15.9% so far this year, falling slightly short of 18.3% rise in Wall Street’s S&P 500. </p> <p><span class="caps">IWG</span> Plc jumped 4.4% to the top of <span class="caps">STOXX</span> 600 after Sky News reported that British office rental firm is exploring a multi-billion pound break-up that would involve splitting it into several companies.</p> <p>Zooplus AG gained 4.3% after Swedish private equity firm <span class="caps">EQT</span> AB made an offer to buy the online pet supplies’ retailer for about 3.36 billion euros ($3.94 billion), trumping a 3.29-billion-euro bid from U.S. private equity Hellman & Friedman.</p> <p>Spain’s Cellnex Telecom slid 4.1% after Citigroup downgraded the stock to “sell”, citing valuation concerns.</p> </div>