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PARIS: French stocks outperformed upbeat European indices on Monday following a convincing parliamentary majority for President Emmanuel Macron, while banks bounced following upgrades and the retail sector recovered from last week’s losses.
France’s blue-chips gained 1.1% after President Emmanuel Macron cemented an overwhelming parliamentary majority further increasing his party’s capacity to push through reforms.
Banks BNP Paribas, Societe Generale and Credit Agricole underpinned gains on the index.
Berenberg’s chief economist Holger Schmieding said France could become the strongest major economy in Europe in a decade.
Euro zone blue-chips rose 1 percent while the pan-European STOXX 600 rose 0.9%.
The retail sector, particularly grocers, which were sent into a tailspin on Friday following Amazon’s surprise US$13.7bil deal to buy Whole Foods, bounced bank, partly on hopes of more deal activity in the sector.
The regional retail index, which suffered its worst week in 16 months last week, rose 0.8% with UK’s Ocado up more than 6% and the top performing major stock across the region.
Exane upgraded Ocado to ”outperform” on hopes that partnerships, if not a takeout, were more likely.
Also, in notable broker activity, Credit Suisse found favour among analysts at Morgan Stanley, Citi and Deutsche Bank.
Citi named Credit Suisse its preferred Swiss bank, while Morgan Stanley reinstated coverage on the stock with an “outperform.” Credit Suisse shares rose more than 3%.
Formal Brexit negotiations were scheduled to get underway on Monday, with Britain’s Brexit Secretary David Davis due to meet EU chief negotiator Michel Barnier at 1100 local time (0900 GMT), though this was not seen to ruffle market sentiment in the short-term. - Reuters
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