Europe’s Stoxx 600 gains on banks boost but fiscal fears hit French stocks
European shares closed higher on Monday, while French equities slid to a six-month low on fiscal concerns and Schneider Electric’s fall after acquiring US software firm PTC. The pan-European Stoxx 600 index ended 0.4 per cent higher, after hitting a four-month low last week as global bond yields surged on inflation, higher corporate bond issuances and worsening fiscal outlooks. France’s CAC 40 fell 0.8 per cent, the biggest loser among regional peers, while the euro hit a 17-month low on fears of a return of sovereign debt crisis dynamics in the euro zone. “What we’re seeing in bond markets is obviously impacting the euro, but it’s also having a knock-on effect on the stock market because of the impact that it could have on earnings,” said Kathleen Brooks, research director at XTB. France’s 2027 budget last week included politically contentious spending cuts and savings measures aimed at narrowing its deficit. Dublin Dublin’s Iseq closed the session marginally up at 14,315. AIB was one of the main movers, increasing by 2.2 per cent to €11.29. The positive move was linked to the group’s ongoing share buyback scheme. Rival Bank of Ireland rose by 0.8 per cent to €18.96. The recent oil price surge has squeezed airlines including Ryanair . The Irish airline’s stock fell by 0.5 per cent to €23.67. The State’s largest institutional landlord, Ires Reit , continued in positive territory after last week’s takeover bid from Baring International Investment, closing up 1 per cent at €1.29. Europe A 10 per cent drop in Schneider Electric weighed on the CAC 40 after its $23 billion swoop for industrial software firm PTC. While analysts could see the strategic rationale behind the deal, they questioned the increased exposure to the software sector at a time valuations are under pressure. RBC Capital Markets analyst Mark Fielding said: “Valuation of industrial software assets has been under pressure due to AI concerns and while we think this is largely misplaced, it does not change the fact [the deal] will increase Schneider’s exposure to this concern.” AkzoNobel rose 1.8 per cent after agreeing to sell its Southeast Asian decorative paints business to Nippon Paint for $1.35 billion. Genmab rose 5.3 per cent after presenting updated data from a trial for its ovarian cancer drug Rina-S that showed a clinically meaningful response rate. London The United Kingdom’s FTSE 100 rose on Monday, steadying after its steepest drop since April last week, as prospects of higher crude supplies kept prices in check. The blue-chip FTSE 100 index closed 0.34 per cent higher at 10,497 points. A survey on Monday showed British services firms reported stronger cost pressures last month as fuel prices surged due to the Middle East conflict Fuel prices have been under scrutiny owing to their impact on inflation expectations and the Bank of England’s interest rate trajectory Ithaca Energy rose 2.2 per cent and was among top gainers on the FTSE 100 after it agreed to acquire Suncor Energy’s offshore oil assets for $842 million in upfront cash “This deal for Canadian assets provides a level of diversification,” said AJ Bell investment director Russ Mould. BT Group rose 1.4 per cent after it agreed to buy troubled broadband provider TalkTalk for £400 million (€470 million) in a government-backed rescue deal. New York The benchmark S&P 500 rose and the Nasdaq reached all-time highs on Monday as most megacap and growth stocks advanced, though risk sentiment remained in check as treasury yields held near multiyear highs. Heavyweight tech stocks took the lead, with Nvidia rising 1.2 per cent, hovering close to its record high hit in the previous session. Meta Platforms, Microsoft and Tesla were up between 1.6 per cent and 2.4 per cent. Ten of the 11 S&P 500 sectors were trading higher, with communication services and energy leading gains. Real estate was the sole laggard. “The AI and tech story continues to drive the bus ... it is so strong that it can fight the headwind from higher interest rates,” said Dennis Dick, founder and market structure analyst at Triple D Trading. PTC was the top gainer on the S&P 500, rising 34 per cent after France’s Schneider Electric agreed to acquire the software firm in a $22.6 billion all-cash deal. Optimism about robust corporate earnings has helped US stocks outperform global rivals in the last six months, despite the shaky geopolitical landscape and inflation worries. – Additional reporting: Reuters