New York (AFP) – Frankfurt equities squeezed out gains Monday after conservatives led by Friedrich Merz won Germany’s national election, with investors hoping that Europe’s largest economy can emerge from recession. Elsewhere, equities mostly slid with investors still concerned about the inflationary effect of US President Donald Trump’s plans to slap tariffs on various trading partners and their impact on interest rates and economic growth. Major US indices finished mostly lower after Trump signaled plans to proceed with tariffs on Canada and Mexico once a 30-day suspension expires.
“Markets like certainty,” said Adam Sarhan of 50 Park Investments. “Right now there is high uncertainty.” But earlier, Frankfurt’s DAX index jumped 0.8 percent at the start of trading but gave up part of its gains as the day wore on, closing 0.6 percent higher. Merz urged a speedy formation of a new coalition government, warning that Trump was driving rapid and disruptive changes and that “the world isn’t waiting for us.”
“The hope that the conservatives’ win might help pull Germany out of economic stupor and help bolster collective defense has lifted investor spirits,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. European defense stocks gained, with Germany’s Rheinmetall up more than six percent and Britain’s BAE Systems up nearly four percent. With more than 28 percent of the vote, Merz’s CDU/CSU bloc handily defeated Chancellor Olaf Scholz’s Social Democrats (SPD) and the Greens, as the anti-immigration Alternative for Germany celebrated a record of over 20 percent.
Merz said he would reach out to the Social Democrats with hopes of forging a stable ruling alliance of the two traditional big-tent parties. But CMC Markets analyst Konstantin Oldenburger said the failure of the DAX to hold onto its gains “can likely be attributed to the understanding that the crucial negotiations between the (conservatives) and the SPD are yet to come.” The euro rose against the dollar and the pound.
Elsewhere Monday, shares in Amsterdam-listed Just Eat Takeaway soared almost 54 percent after it received a 4.1 billion euro ($4.3 billion) takeover offer from investment giant Prosus. Asian equity markets mostly fell following a dour end to last week for Wall Street fueled by disappointing economic data, with a report on Friday showing that activity in the US key services sector hit a 25-month low in February and that consumer sentiment dived almost 10 percent from January. This week’s calendar includes earnings from artificial intelligence giant Nvidia, key US inflation data, and a different reading on consumer confidence.
Among individual companies, Starbucks rose 1.3 percent as the coffee giant said it would cut 1,100 corporate and administrative jobs as part of a reorganization under new CEO Brian Niccol. But Alibaba tumbled 10.3 percent after announcing plans to spend more than $50 billion on artificial intelligence over the next three years, sparking worries about profitability.
– Key figures around 2140 GMT –
New York – Dow: UP 0.1 percent at 43,461.21 (close)
New York – S&P 500: DOWN 0.5 percent at 5,983.25 (close)
New York – Nasdaq: DOWN 1.2 percent at 19,286.92 (close)
Frankfurt – DAX: UP 0.6 percent at 22,425.93 (close)
Paris – CAC 40: DOWN 0.8 percent at 8,090.99 (close)
London – FTSE 100: FLAT at 8,658.98 (close)
Hong Kong – Hang Seng Index: DOWN 0.6 percent at 23,341.61 (close)
Shanghai – Composite: DOWN 0.2 percent at 3,373.03 (close)
Tokyo – Nikkei 225: Closed for a holiday
Euro/dollar: UP at $1.0468 from $1.0458 on Friday
Pound/dollar: DOWN at $1.2623 from $1.2632
Dollar/yen: UP at 149.76 from 149.73 yen
Euro/pound: UP at 82.91 pence from 82.79 pence
Brent North Sea Crude: UP 0.5 percent at $74.78 per barrel
West Texas Intermediate: UP 0.4 percent at $70.70 per barrel.
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© 2024 AFP
