Macron win and Brexit talks boost European stocks

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(AFP) European stock markets rose on Monday as traders greeted a strong victory for President Emmanuel Macron's centrist party in French parliamentary elections, as Britain begins formal Brexit talks.

London's benchmark FTSE 100 index was up more than half a percent compared with the close on Friday.

In the eurozone, Frankfurt's DAX 30 index and the Paris CAC 40 gained one percent or more.

"Equities have made a strong start to the new trading week. Macron gaining a French parliamentary majority has been welcomed for Europe, as have delayed Brexit negotiations finally getting underway," said Accendo Markets analyst Mike van Dulken.

Macron's year-old Republique en Marche party won one of France's biggest post-war majorities, strengthening his hand in implementing his programme of business-friendly reforms.

The euro edged higher against the dollar after his party and its allies won 350 seats in the 577-seat National Assembly, giving the president a strong mandate to enact business-friendly reforms.

However the currency slipped back somewhat amid mild disappointment that the party did not secure the forecast landslide.

Soft Brexit hopes

Britain's Brexit minister David Davis was meanwhile on Monday meeting Michel Barnier, the EU's chief Brexit negotiator, kicking off hugely complex withdrawal negotiations that are expected to conclude within two years.

"A slightly softer form of Brexit now looks more likely than previously envisaged," said analysts at Capital Economics, "but we doubt that the government will do a full U-turn on its Brexit stance".

Earlier, Asian stock markets built on last week's gains following another record close on Wall Street ahead of the weekend thanks to energy stocks.

The Dow in New York was higher again at the start of trading Monday.

The dollar climbed above 111 yen Monday after Japan posted a surprise trade deficit for May. The Nikkei ended 0.6-percent higher, although troubled airbag maker Takata plunged 16.5 percent on reports it plans to file for bankruptcy and sell its assets to a US firm. 

Oil prices were up slightly, amid lingering glut concerns as US companies' rising production offsets big output cuts agreed by OPEC and Russia.

The Baker Hughes rig count showed another rise last week, Greg McKenna, chief market strategist at AxiTrader, pointed out in a client note.

"That's 22 weeks in a row that oil rigs have been added, a record run," he said, although he pointed out that the rate of new additions was easing.

"Even just a casual observance of the energy news would show that the conversation is turning a little from OPEC and its production cut deal efficacy to US production and its sustainability -– or growth -– at these levels," he added.

Key figures around 15:35 CET

  • London - FTSE 100: UP 0.6 percent at 7,507.09 points
  • Paris - CAC 40: UP 1.0 percent at 5,314.86
  • Frankfurt - DAX 30: UP 1.1 percent at 12,888.19
  • EURO STOXX 50: UP 1.1 percent at 3,583.08
  • New York - Dow: UP 0.3 percent at 21,450.74
  • Tokyo - Nikkei 225: UP 0.6 percent at 20,067.75 (close)
  • Hong Kong - Hang Seng: UP 1.2 percent at 25,924.55 (close)
  • Shanghai - Composite: UP 0.7 percent at 3,144.37 (close)
  • Euro/dollar: DOWN at $1.1179 from $1.1194 at 2100 GMT on Friday
  • Pound/dollar: DOWN at $1.2764 from $1.2777
  • Dollar/yen: UP at 111.30 yen from 110.89 yen
  • Oil - Brent North Sea: UP 21 cents at $47.58 per barrel
  • Oil - West Texas Intermediate: UP 11 cents at $45.08

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