Written by Shashwat Chauhan and Jesús Calero
(Reuters) – European shares rose on Monday, with banking and technology shares rebounding from last week's losses after political uncertainty in France sent markets into a panic, while Danish insurer Topdanmark rose on a takeover bid by Sambo.
By 0816 GMT, the euro was up 0.3%, moving away from the worst weekly percentage decline so far this year.
Technology stocks led sectoral gains with a 1.6% jump after falling about 2% last week, while European banks advanced about 1% after falling more than 8% last week.
European markets were under pressure after President Emmanuel Macron called for early elections after the defeat suffered by his ruling centrist party at the hands of the anti-EU National Rally party led by Marine Le Pen in the European Parliament elections.
Daniela Hathorne, chief investor, said: “We see that the divergence between European and American stocks has become very clear… France was the most evidence of this due to the early elections and the fear that right-wing parties might gather more and more.” Market Analyst at Capital.com.
“There is a lot of hesitation and a lot for markets to absorb.”
Most stock markets in the region rose during the day, with the French index rising by 0.5% after falling by more than 6% last week.
In contrast, basic resources fell by 0.7%, with most metal prices falling after data showed that industrial production in China, the largest consumer, was weaker than expected in May.
Separately, Italian EU-Harmonized Consumer Prices (HICP) rose 0.2% month-on-month in May and also rose 0.8% from a year earlier, confirming preliminary data.
UK inflation data is due to be released alongside the broader euro zone reading later this week, which will also be packed with interest rate decisions from central banks in Switzerland, Norway and the UK.
Meanwhile, global equity strategists at Wall Street Citibank downgraded European stocks to “neutral” from “overweight,” citing increased political risks following France's decision to call early parliamentary elections.
Among individual stocks, Topdanmark jumped 20.4% after Finnish insurance company Sampo agreed to buy its Danish competitor in a deal that values the company at 33 billion kroner ($4.73 billion), the two companies said. Sambo shares fell by about 3%.
Shares of ING, the largest Dutch bank by assets, rose 2.5% after the bank forecast total income growth of between 4% and 5% annually over the period 2024-2027.
Shares in British restaurant operator SSB Group fell 3.7 percent after Goldman Sachs lowered its rating to “sell” from “neutral.”
Adidas (OTC:) stock fell 1.5% after a report said the company had launched an investigation into widespread bribery allegations in China.
