European stocks were treading water on Monday, with French elections set for the weekend — an event that’s left investors in a world of uncertainty.
The Stoxx 600 Index was largely unchanged by 8:14 a.m. in London, with autos leading gains while basic resources lagged. Miners were under pressure as iron ore fell to the lowest level since early April on concerns that China will struggle to resolve its property crisis.
Among single stocks, Argenx SE soared after Vyvgart Hytrulo shot gained US approval to treat a rare nervous system disorder, a win for the biotechnology firm after a series of setbacks. SIG Plc shares sank after it lowered its full-year guidance due to subdued demand.
The French election on Sunday will be the main risk event this week, with opinion polls showing that far-right National Rally party gaining traction. The prospect of a change in the balance of power in France has investors on edge, with banks, highway operators and utilities among the stocks with most on the line.
Moves in European and US markets were more in line last week as the political uncertainty originating in France was better digested by markets, still the overhang remains, according to JPMorgan’s Mislav Matejka. And volatility in French stocks remains elevated.
“We continue to see heightened political uncertainty weighing on European stocks,” said Marija Veitmane, senior multi-asset strategist at State Street Global Markets. While insitutional investors selling since late March has not accelerated since the election, “elevated positions suggest that it can continue,” she added.
Among other major corporate news, Prudential Plc launched a $2 billion share buyback program, as the insurer outlined progress that includes the potential for further shareholder returns.
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