European Stocks Meander as France Turmoil Raises Volatility

(Bloomberg) -- European stock markets fluctuated between gains and losses as concerns around the upcoming French election sent equity volatility to the highest since October.

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Europe’s Stoxx 600 edged 0.1% higher at the close in London after a bumpy day. France’s CAC 40 pared some of its losses and ended up 0.9%. The Paris index slid last week to the lowest since January, shedding more than $200 billion in value and losing its spot as Europe’s biggest equity market, after President Emmanuel Macron called a snap election.

Markets weighed political concerns after far-right leader Marine Le Pen’s assurances that she will respect France’s political institutions if she wins the election. The vote is widely expected to make her National Rally become the biggest party in the lower house, a prospect which has caused alarm among investors.

“If the election yields the outcome implied by the polls, risk premia are set rise further,” said Bank J. Safra Sarasin equity strategist Wolf von Rotberg, after a gauge measuring potential market swings extended its rise.

While some, including Liberum, saw the worries and selloff as overdone, Citigroup downgraded the region’s rating and upgraded US stocks.

Travel and leisure as well as banks led gains on Monday, while health-care lagged. Among single stock movers, SSP Group PLC shares dropped after Goldman Sachs cut the stock to sell. Karnov Group slumped after Greenoaks and Long Path withdrew its offer following the closing of the offer period. EssilorLuxottica shares rose as much as 3.2% after UBS upgraded the French eyewear maker to buy from neutral.

For more on equity markets:

  • French Politics Flips the Script on Bullish Europe: Taking Stock

  • M&A Watch Europe: Topdanmark, Hargreaves Lansdown, Believe

  • US Stock Futures Little Changed

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