The European markets ended the first trading session of the new week with mixed results. Investors were in a cautious mood due to the results of the German election over the weekend. German Chancellor Angela Merkel won a fourth term in office on Sunday, but will have to govern with a far less stable coalition.
French President Emmanuel Macron’s new centrist political party also suffered its first electoral setback in a partial Senate election on Sunday, dealing a blow to the popularity of Macron as he pushes through unpopular reforms.
Euro area economic recovery is now firm and broad-based, and the latest data suggest that the momentum is set to continue in the period ahead and policymakers are more confident that inflation will converge at the target eventually, European Central Bank President Mario Draghi said Monday.
“The ongoing recovery is, crucially, driven by domestic forces, and the labor market has notably improved,” Draghi said at a hearing at the European Parliament in Brussels.
“The domestic drivers are making the recovery more robust and resilient to adverse external influences,” he said.
Draghi also said that the employment gains and the rising household wealth are supporting the private consumption outlook. Further, investment is improving, thanks to very favorable financing conditions, he added.
There is a pocket of risk in the rapid growth of UK consumer credit, the Financial Policy Committee of the Bank of England said Monday.
Lenders overall are placing too much weight on the recent performance of consumer lending in benign conditions as an indicator of underlying credit quality.
Banks are underestimating the losses they could incur in a downturn, the FPC noted.
The pan-European Stoxx Europe 600 index advanced 0.26 percent. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.10 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.44 percent.
The DAX of Germany climbed 0.02 percent, but the CAC 40 of France fell 0.27 percent. The FTSE 100 of the U.K. declined 0.13 percent, but the SMI of Switzerland finished higher by 0.04 percent.
In Frankfurt, Deutsche Lufthansa climbed 0.55 percent after reports that the airline group is offering to pay 200 million euros to buy its bankrupt smaller opponent Air Berlin.
In Paris, Alstom rose 1.27 percent. The speed-train maker confirmed that it was in discussions with Siemens about a possible combination of Alstom with Siemens Mobility Division.