Â© Reuters. FILE PHOTO: The DAX chart of the German equity price index is pictured on the stock exchange in Frankfurt, Germany September 24, 2021. REUTERS / Staff
By Sruthi Shankar
(Reuters) – German stocks hit ten-day highs on Monday after federal election results reduced the chances of a left-wing coalition forming a government, while wider European markets applauded a surge in prices crude that fueled the oil stocks.
The blue-chip German index jumped 0.9%, leading gains among regional indices, while the pan-European index rose 0.4%.
Germany’s center-left Social Democrats were expected to start trying to form a government after narrowly winning their first national elections since 2005, claiming they would seek to form a coalition with the Greens and the Free Liberal Democrats in what we call the “traffic” light coalition.
Although the formation of the new government may take some time, investors have been relieved that the far-left Linke party has fallen below the 5% threshold required to enter parliament.
“The poor electoral performance of the left-wing Die Linke party seems to have ruled out a left-wing alliance, and its likely negative impact on German stocks,” according to BlackRock (NYSE 🙂 Investment Institute.
“We see the outcome of the elections ultimately leading to a moderate government on the left or on the right.”
German real estate company Vonovia, aircraft engine manufacturer MTU Aero Engines (OTC 🙂 and renewable energy company Siemens Energy were the main DAX winners.
The oil and gas index climbed 1.8% to a three-month high as futures moved towards $ 80 a barrel amid supply concerns. [O/R]
Oil majors TotalEnergies, Royal Dutch Shell (LON 🙂 and BP (NYSE 🙂 rose between 1.8% and 2.4%, providing the biggest boost to the STOXX 600.
As concerns over hawkish central bank policies, fallout from Evergrande’s financial woes in China and inflation weighed on sentiment, investors are hopeful that the vaccination will lead to a steady global recovery.
The STOXX 600 Index has climbed 16.5% so far this year, falling slightly short of Wall Street’s 18.6% rise.
IWG Plc jumped 6.3% to the top of STOXX 600 after Sky News reported the UK office rental company was exploring a multibillion pound split that would involve its split into several companies.
Zooplus AG gained 4.2% after Swedish private equity firm EQT (NYSE 🙂 AB made an offer to buy the online pet supplies retailer for around 3.36 billion euros (3 , $ 94 billion), exceeding an offer of 3.29 billion euros from US private equity Hellman & Friedman.
Spain’s Cellnex Telecom slipped 3% after Citigroup (NYSE 🙂 lowered the stock to âsell,â citing valuation issues.
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