European stock markets edged up on Monday after early losses as investors digested snap French elections in which a hung parliament appeared the likeliest outcome.
In France, the left was set to emerge as the biggest group in a new parliament, beating out a resurgent far-right in a vote called by President Emmanuel Macron three years ahead of schedule.
Macron’s centrist alliance will have fewer seats in parliament, but held up better than expected.
The outcome, in which no bloc is expected to have an outright majority, has left the country in a “thick fog” of uncertainty, according to one pollster, with the euro dropping around 0.4 percent from Friday’s levels before clawing back most of the losses.
“The best that can be said is that neither the (left-wing) NFP nor (far-right) National Rally will be able to implement their respective electoral manifestos in full, which would most worry investors fretful about France’s fiscal situation,” Alvin Tan of RBC capital markets said.
While “the worst outcome for the euro has been averted for now”, Tan added, uncertainty remains “and the fiscal balance is unlikely to improve significantly as a result”.
Paris’s CAC 40 benchmark stocks index sank at the open Monday, but recovered to post modest gains in morning trade, as did Frankfurt’s DAX. The FTSE 100 index in London also inched up.
Asian markets mostly sank, with Hong Kong’s Hang Seng Index down more than 1.5 percent at the close.
Tokyo’s Nikkei index seesawed in and out the red throughout the day before finally ending slightly down, while the broader Topix shed more than one percent after hitting a new high last week.
Taipei was a rare bright spot, posting solid gains on the back of a surge in shares of chipmaking giant TSMC, which added nearly three percent over the course of the day.
Sydney, Seoul, Mumbai, Jakarta and Singapore were down, while Manila rose.
Thousands of workers in South Korea walked off the job at tech giant Samsung on Monday morning as they kicked off a three-day general strike, according to a union rep, who warned key memory chip production would be affected.
Samsung Electronics is the world’s largest memory chip maker and accounts for a significant chunk of global output.
Workers gathered outside the company’s foundry and semiconductor factory in Hwaseong, Gyeonggi, an hour south of Seoul, with National Samsung Electronics Union head Son Woo-mok warning: “Today’s general strike is just the beginning.”
However, the tech giant’s shares were slightly up from Friday’s price, which was buoyed by a company forecast that second-quarter profits would beat expectations by more than 25 percent.
On Wall Street, the Nasdaq and S&P 500 hit fresh highs on Friday, and the Dow Jones Industrial Average also ticked upwards after official data showed the US labour market cooling, raising expectations of a September interest rate cut.
Investors will be looking for more clues in an appearance by Federal Reserve boss Jerome Powell before the US Senate banking committee on Tuesday, as well as fresh consumer price index data due later in the week.
– Key figures around 0815 GMT –
Tokyo – Nikkei 225: DOWN 0.3 percent at 40,780.70 (close)
Hong Kong – Hang Seng Index: DOWN 1.6 percent at 17,524.06 (close)
Shanghai – Composite: DOWN 1 percent at 2,922.45 (close)
London – FTSE 100: UP 0.1 at 8,208.88
Pound/dollar: DOWN at $1.2811 from $1.2816 on Friday
Euro/pound: FLAT at 84.58 pence
Euro/dollar: DOWN at $1.0838 from $1.0842
Dollar/yen: UP at 160.84 yen from 160.78 yen
West Texas Intermediate: DOWN 0.6 percent at $82.63 per barrel
Brent North Sea Crude: DOWN 0.5 percent at $86.14 per barrel
New York – Dow: UP 0.2 percent at 39,375.87 points (close)
