As pro-EU parties continue to expand their influence in the European Parliament elections, stock prices for different EU firms surge. The hike was also encouraged by the recent confirmation of merger talks between Renault and Fiat Chrysler. Investors immediately flocked to purchase automaker stocks, sending indexes higher.
The STOXX 600 surged by around 0.23 percent, indicating a possible resurgence despite all other major EU indices still staying stagnant. Trading volumes were somewhat slow, mainly due to the recent public holidays in Britain and the United States. The MSCI world equity index, which includes shares from 47 countries, had jumped slightly by 0.06 percent.
Following the confirmation of merger talks between Fiat Chrysler and Renault, automotive-related stocks surged by more than 1.6 percent. The Italian-American carmaker had confirmed that it had submitted a "transformative merger" proposal to Renault. A merger between both companies would essentially result in the establishment of the world's third-largest carmaker.
Apart from booster Fiat and Renault shares, markets also got a kick out of the recent provisional results from the EU elections. As it stands, liberals and Greens were able to match the pace of Euro-skeptic parties that had recently taken a quarter of the seats. This has been by some as a detriment to the country's ability to unite in addressing different key issues such as global trade negotiations.
Analysts predict that investors may once again inject new cash to EU stocks given a favorable result in the elections. However, there is apparently still some hesitation from investors given the global political climate amid the ongoing China-US trade war and the looming Brexit conundrum. Analysts predict that these looming headwinds will likely limit the size and pace of major EU stocks moving forward.
The trade tension between the United States and China has continued to escalate further exacerbated by the tit-for-tat tariff hikes that have sent retail stocks down between both nations. The retaliatory measures, which include the recent trade ban on Huawei, have rattled investors worldwide, pressuring stock lower as both nations economies suffer.
Other parts of the country saw fluctuating results with Greek stocks leading with a 6.1 percent rise resulting in a possible win by the opposition conservative New Democracy party. German 10-year bond yield and the Italian 10-year government bond yield remained stable.
The British pound had weakened by 0.2 percent to $1.2687 following British Prime Minister Theresa May exit. The euro has rallied to a high of $1.12, which latest slipped by 0.1 percent to $1.1196
