European shares set for weekly gains; focus shifts to French elections By Reuters
© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, April 5, 2022. REUTERS/StaffBy Susan Mathew
(Reuters) -European shares rallied on Friday to erase weekly losses, while investors focused on a tight race between far-right rival Marine Le Pen and incumbent Emmanuel Macron in the runup to the first round of French presidential elections over the weekend.
Financials and commodity stocks led the gains with all major sectors in positive territory. The pan-European index added 1.1% and is now set to end the week at about 0.6% higher.
Topping the index was Banco BPM’s 14.1% surge, after French bank Credit Agricole (OTC:) said it has bought a 9.2% stake in Italy’s third-largest bank.
“European markets are mostly playing catch up with the U.S. from yesterday’s close,” said Julien Lafargue, chief market strategist at Barclays (LON:) Private Bank, adding that investors are waiting to get a sense of what earnings could look like with big U.S. banks set to kick off next week. [.N]
“Investor mood is not is not very optimistic these days. As long as earnings are okay, we could see positive surprises on the back of that.”
Despite a 12% recovery from one-year lows hit in March, the STOXX 600 index is still down more than 6% this year on worries that surging inflation due to the Ukraine war will trigger central bank moves that could squeeze growth.
“Europe wasn’t really the best place already because of what is going on in Ukraine. It’s going to be tricky for Europe to significantly outperform until we have clarity. The next month and a half will be pretty important for Europe,” said Lafargue.
In Sunday’s first round of election in France, centre-left Macron is seen winning, but rival Marine Le Pen has surged in polls in recent weeks, leaving her victory within the margins of error. The two leading candidates from the vote will head to a run-off on April 24.
Barclay’s Lafargue said despite the polls, the turnout or lack there of could swing the election.
40 index rose 1.8%, but is down about 1.7% this week – the most among European peers – on election uncertainty.
Among other stocks, Atlantia’s rallied 3.7% after a report that top shareholder Edizione and Blackstone (NYSE:) could launch a bid for the Italian infrastructure group at 24 euros per share around Easter.
Telecom Italia (MI:) slipped 1.0% after it rejected a 10.8 billion euros ($11.8 billion) offer from KKR.
