Europe close: Stocks up as Dutch far-right party retreats in polls
European equity markets were slightly higher on Monday as investors looked to the Dutch elections, while oil prices continued to fall.
The benchmark Stoxx Europe 600 index was up 0.38% to 374.64, Germany’s DAX rose 0.22% to 11,990.03 and France’s CAC 40 was 0.13% firmer at 4,999.60.
In currency markets, the euro was at 1.0662 against the dollar, off by 0.16% for the day, and down 0.71% versus the pound at 0.8715.
Investors were eyeing Wednesday’s election in the Netherlands, although polls showed far-right candidate Geert Wilders’ Freedom Party (PVV) losing ground and unlikely to be the next Dutch prime minister, and with rival parties vowing to not join a coalition with him, events at the weekend have raised some concern.
Two Turkish ministers were barred from campaigning in the Netherlands for a referendum to boost Turkish President Recep Tayyip Erdogan’s power, which analysts at Monex Europe said appeared to be another attempt by Erdogan to destabilise the European Union, as the Netherlands is now in a blackout period before voting starts.
"Diplomatic tensions flared, with Erdogan claiming that the ban shows ‘Nazism is alive in the west’, comments which were met with criticism from both the Dutch Prime Minister and Germany’s foreign minister," Monex Europe said.
Chris Beauchamp, chief market analyst at IG said that the diplomatic spat between Turkey and the Netherlands gives the Freedom Party a new lease of life.
"The complex nature of Dutch politics means that markets are not unduly concerned at present, but it will be a worrying signal ahead of the French first round next month."
Elsewhere, European Council president and former Polish Prime Minister Donald Tusk has been summoned for questioning on Wednesday by Warsaw for a case concerning ex-secret service officials. Tusk was recently reappointed for a second term with Poland, the only country to vote against his extension.
The pound rose following news that Scotland's first minister would table a section 30 order in Holyrood, which is a provision in the existing devolution legislation that allows for powers normally reserved to Westminster to be given to Scotland's parliament, as a first step on the path to a second referendum.
Meanwhile, oil prices traded lower after Baker Hughes reported on Friday that the number of US oil rigs rose by eight to 617, the highest since September 2015.
Craig Erlam at Oanda said: "Of course, these changes take time to have an impact and non-OPEC compliance is still a little low but with an extension to the deal in doubt, prices are reverting back towards pre-deal levels, although I doubt we’ll get close to the lows any time soon."
Brent crude was down 0.04% to $51.35 a barrel and West Texas Intermediate was 0.31% weaker at $48.34.
In corporate news, Amec Foster Wheeler climbed 11.61% as it agreed the terms of an all-share offer from oilfield services company Wood Group that values the engineer at around £2.2bn.
HSBC was up 0.81% after it hired ex-Prudential boss Mark Tucker to replace Douglas Flint as chairman after 22 years at the world's fourth largest bank.