(Reuters) – European shares rose on Monday, with French stocks leading the rally after the far-right National Rally party made historic gains in the first round of parliamentary elections, but by a smaller margin than some opinion polls had suggested.
France’s blue chips rose 2.6% to lead gains among regional markets, with the country’s major banks including BNP Paribas, Societe Generale and Credit Agricole advancing between 4.8% and 7.9%.
That helped the regional index rise 1% by 0709 GMT, after four straight sessions of losses.
The National Front and its allies received 33% of the votes, followed by the Left Bloc with 28% and centrist President Emmanuel Macron with only 20%, but the final result will depend on days of bargaining before the runoff on July 7.
The market reaction was mostly a case of “buy the rumor and sell the truth” and chatter that the National Rally might not secure an absolute majority in the second round, said Ipek Ozkardeskaya, chief analyst at Swissquote Bank.
The CAC 40 closed at its weakest level in more than five months on Friday amid concerns about France’s fiscal discipline under the new government.
Among individual stocks, Atos rose 11.7% after the French technology company reached an agreement with a group of banks and bondholders on the terms of its debt restructuring.
Nestle shares rose 1.1% after its chief executive said in an interview with a local newspaper over the weekend that the Swiss food giant was targeting stable sales volume growth from the second quarter through the rest of the year as cost inflation eases.