The European markets initially traded to the downside on Monday, after the French and Greek election results showed a rejection of austerity. The markets were able to rebound from the session lows and several managed to finish in positive territory. The French market in particular managed a significant gain. The election result is thought to have already been priced into the French market.
Francois Hollande, who got 52 percent votes, is now the new President of France, unseating Nicholas Sarkozy who got only 48 percent of votes. Hollande had alleged during the campaign that Sarkozy ruined the economy, while Sarkozy criticized the spending plans of Hollande.
Also in Greece, results of the parliamentary elections showed that the two main parties - the conservative New Democracy and the left-wing Pasok - suffered huge defeats, while those opposed to more cuts won almost 60 percent support.
Concerns remained about the possibility of a new left-wing coalition government in Greece, which vowed to end austerity measures and reject the terms of Greece-Troika bailout deal.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 1.54 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, gained 0.70 percent.
The CAC 40 of France climbed by 1.65 percent and the DAX of Germany increased by 0.12 percent. The SMI of Switzerland finished lower by 0.27 percent. The U.K. markets were closed on Monday for a holiday.
In Frankfurt, Lufthansa declined by 1.57 percent after Deutsche Bank lowered its price target on the stock.
Kloeckner closed down by 1.20 percent. Exane BNP downgraded the stock to "Neutral" from "Outperform."
Retailer Fielmann finished up by 1.59 percent. Merrill Lynch raised the stock to "Neutral" from "Underperform."
Gagfah lost 1.49 percent after Deutsche Bank reduced its rating on the stock to "Hold."
Air Berlin fell by 1.24 percent. The airline's passenger numbers and capacity declined in the month of April in the context of the efficiency-increasing program "Shape & Size." However, capacity utilization increased.
QSC sank by 8.77 percent. The company's first quarter profit plunged, despite a 10 percent increase in revenues.
In Zurich, Novartis finished up by 0.58 percent. The company said results from a late-stage study showed its pasireotide LAR (long-acting release) to be more effective than the current standard medical therapy in patients with acromegaly - a rare hormonal disorder. The study met its primary endpoint.
Roche declined by 3.45 percent. The company announced that it has stopped a study of its heart-disease drug, dalcetrapib, due to disappointing results.
Swiss Re secured $400 million in natural catastrophe coverage bond program through the newly-formed Mythen Ltd. The stock closed down by 0.51 percent.
Eurozone investor sentiment declined markedly in May to the lowest level since September 2009, data released by think tank Sentix showed Monday. The corresponding index fell more than expected to -24.5 from -14.7 in April. The expected reading for May was -15.3.
The German construction sector contracted slightly in April, survey results from Markit Economics showed Monday. The seasonally adjusted construction Purchasing Managers' Index fell to 49.8 from March's 11-month high of 55.7. The index moved close to near stagnation.
German factory orders were better than expected in March, suggesting that the growth-engine of the 17-nation currency bloc may be undergoing a slow recovery. Underpinned by robust foreign demand, factory orders grew 2.2 percent in March from the previous month, the Federal Ministry of Economy and Technology reported Monday. The monthly growth far exceeded the 0.5 percent growth expected by economists and February's revised 0.6 percent expansion.
by RTT Staff Writer
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