Stock market today: French shares rise 2.8% as far-right party takes lead in first round of elections

Stocks advanced on Monday morning in Europe, with the benchmark index in Paris rising 2.8% after the far-right National Rally gained a strong lead in the first round of legislative elections.

Other European markets opened higher, while most Asian markets also gained.

The euro rose, rising from $1.0744 to $1.0770, as research agencies suggested the National Rally will be able to obtain a majority in the lower house of parliament. However, the outcome remains uncertain and the voting system is complex.

The CAC 40 in Paris jumped 2.8% to 7,688.20, while Germany’s DAX rose 0.9% to 18,394.56. In London, the FTSE 100 rose 0.6% to 8,209.97.

The gains for the euro were likely due to relief that far-right parties did not win more votes than expected, economists at ING Economics said in a commentary.

“Still, the results of the first round do not offer much certainty about the composition of the parliament, and the second round scheduled for next weekend is in fact the big risk event,” he said.

In Asian trading, Japan’s benchmark Nikkei 225 index rose 0.1% to 39,631.06 after a quarterly survey by the Bank of Japan, called “tankan”, showed a modest improvement in confidence among the country’s largest manufacturers between April and June.

However, the government lowered its growth estimate for the first quarter of the year, to a negative annual rate of 2.9%, compared to the previous value of -1.8%.

“Across all sectors and company sizes, business conditions remained stable at 12, which is consistent with (quarterly) GDP growth of around 0%,” said Marcel Thieliant of Capital Economics in assessing the tankan. “A further slowdown in GDP growth this quarter would be consistent with the drop in industrial production that companies forecast for June.”

The dollar rose further against the Japanese yen and traded on Monday morning at 161.04 yen, up from 160.80 yen on Friday.

The Shanghai Composite rose 0.9% to 2,994.73 after a survey of factory purchasing managers released over the weekend showed conditions remained in contraction for the second month in a row.

But a similar survey of private sector industrial activity, released on Monday, showed an improvement in business conditions. The Caixin Industrial PMI rose to 51.8 in June, on a scale that goes up to 100, compared to 51.7 in the previous month. Readings above 50 are considered to show an expansion.

Hong Kong markets were closed for public holidays.

S of Australia&P/ASX 200 fell 0.2% to 7,750.70. South Korea’s Kospi rose 0.2% to 2,804.31 after a private sector survey showed South Korea’s factory activity was the best since April 2022.

On Friday, a flood of sales at the end of the day left S.&P500 0.4% lower at 5,460.48 and in the red for the week. The Nasdaq Composite fell 0.7% to 17,732.60, while the Dow Jones Industrial Average finished 0.1% lower at 39,118.86.

Despite the pessimistic ending, the S&The OP 500 and the Nasdaq remain near their all-time highs.

YOU&OP 500 gained 3.5% in June and is up about 14.5% so far this year.

The Nasdaq gained about 6% for the month and is up 18.1% this year.

A pullback in big technology stocks, which were big winners in the market’s record rally, weighed on the market on Friday. Apple fell 1.6%, Microsoft lost 1.3% and Meta Platforms finished 3% lower.

A report showed inflation continues to decline. Investors hope that cooling inflation will prompt the Federal Reserve to begin cutting interest rates, which remain at their highest level in more than 20 years.

Consumer prices rose 2.6% in May compared with a year earlier, according to the latest personal consumption expenditures index, or PCE. This signaled a continued reduction from a reading of 2.7% in April and is sharply lower than the peak reading of 7.1% two years ago.

The Fed has kept interest rates at their highest level in more than two decades in an effort to control inflation back to its 2% target. Other measures of inflation, including the well-known consumer price index, have also shown that price pressures are easing.

In other trading, US benchmark crude rose 60 cents to $82.14 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 57 cents to $85.57 a barrel.