European stocks rose at the start of the week as easing French bond market tensions and expectations of stable interest rates supported sentiment. Investors were also preparing for a busy period of central bank decisions, economic data and corporate earnings.
The STOXX 50 and STOXX 600 both gained around 0.3% in early trading on Monday. France’s CAC 40 rose 0.7%, Germany’s DAX gained 0.6% and the UK’s FTSE 100 advanced 0.4%. Italy’s FTSE MIB climbed 0.8%, while Spain’s IBEX 35 fell 0.6%.
French shares benefited from a reduction in the gap between French and German 10-year government bond yields. The spread narrowed to around 161 basis points, down from 176 basis points the previous week, easing some concerns over France’s borrowing costs and financial outlook.
Moody’s maintained France’s Aa3 credit rating on Friday but kept its outlook negative. Political uncertainty and concerns about the country’s public finances remain risks, although the decision to avoid a downgrade provided some relief for markets.
Banking shares were among the stronger performers, with BNP Paribas gaining 1.5% and UniCredit rising 1.4%. Hermes also advanced 2.2%.
JPMorgan European Discovery Trust plc is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.
