Europe open: Shares up as Turkey election, US debt ceiling in focus

European shares opened higher on Monday, following a strong showing in Asia as investors eyed developments in the Turkish election and continuing talks on the US debt ceiling.

The pan-European Stoxx 600 index was up 0.37% in early trade, with all major bourses higher. Asian stocks closed higher across the board.

US President Joe Biden on Sunday said he expected to meet with congressional leaders on Tuesday for talks on a plan to raise the nation's debt limit and avoid a default.

Eyes will also be on the US retail sales snapshot due out Tuesday, amid fears of a slowdown after a downbeat view from consumers in the University of Michigan survey on Friday. Oil prices were also lower on fears of a US recession.

In Turkey, the tightly-contested election headed for a runoff vote at the end of the month, after neither incumbent President Tayyip Erdogan nor his rival Kemal Kilicdaroglu won an outright majority.

Hargreaves Lansdown analyst Susannah Streeter said the uncertainty was hitting the Turkish lira.

“Erdogan has led highly controversial monetary policies aimed at increasing exports, rather than tackling painful inflation, and the prospect of Turkey’s ‘strongman’ winning another term has weakened the currency further,” she said.

“There are expectations of a rollercoaster ride in the days ahead, as sentiment waxes and wanes about the prospects for the opposition coalition, which has pledged to pull more conventional levers to restore financial stability.”

In economic news, Germany's wholesale price index fell slightly in April compared to the same month last year, the first year-on-year drop since December 2020.

On the equities front, Diploma shares gained as the company lifted guidance after strong first half results.

Reporting by Frank Prenesti for Sharecast.com