Europe midday: Stoxx on the rise as Tories face defeat in UK election
European shares were higher as investors bet on a September rate cut in the US and also looked ahead to the UK General Election, widely expected to see the ruling Conservatives kicked out of office after 14 years in power.
The pan-regional Stoxx 600 index was up 0.59% in early deals at 517.72. Britain's FTSE 100 was up 0.83% and France's CAC 40 rose 0.76% ahead of the second round of voting in national elections on Sunday.
Trading was expected to be subdued with US markets closed for the Independence Day holiday.
Polling stations have opened in Britain where the main opposition Labour Party, led by Keir Starmer, is expected to win by a landslide, although the size of any majority fluctuates wildly depending on which forecast you read.
"European markets are maintaining their upbeat tone as we move through the week, with the FTSE 100 leading the way as the electorate head to the polls. Today’s UK election looks unlikely to cause too many shockwaves given just how resounding the Labour party victory is expected to be, with markets feeling optimistic over the potential change at Downing Street," said Scope Markets analyst Joshua Mahony.
"Coming off the back of a volatile 14-year stint for the Conservatives party that saw five Prime Ministers within the past nine-years alone, we are seeing the pound strengthen in anticipation of a shift to a stable Labour majority should that come to pass."
"The YouGov poll seen yesterday points towards a 212-seat majority, representing the biggest win since 1832. With that in mind, the chance of any substantial surprise looks minimal at best, with traders instead looking ahead to the French election for potential fireworks."
In economic news, German factory orders posted a shock 1.6% fall in May against a forecast rise of 0.5%.
The Eurozone’s beleaguered construction sector reported another sharp decrease in output in June, a closely-watched survey showed on Thursday.
The latest HCOB Eurozone construction PMI total activity index fell to 41.8 from 42.9 in May. A reading above the neutral 50.0 indicates growth, while one below it suggests contraction.
The rate of decline in output was the the second-strongest since mid-2020. Firms reported weak demand and a slide in order book volumes, leading to further job cuts.
On the equities front, Smith and Nephew surged as Swedish activist investor Cevian Capital purchased a 5% stake in the medical equipment manufacturer.
Shares in Continental also soared as Citi upgraded the German auto parts maker to 'buy'.
Reporting by Frank Prenesti for Sharecast.com