Europe open: Shares rally despite France Budget crisis; Direct Line surges
European shares rallied on Thursday as investors eyed inflation data from German and Spain for any indication on the future path of eurozone interest rates.
The pan-European Stoxx 600 index was up 0.42% to 507 points. France’s CAC 40 gained 0.39% despite the ongoing row over Prime Minister Michel Barnier’s attempts to pass his tough Budget.
Far-right anti-immigrant leader Marine Le Pen has threatened to collapse Barnier's government in a no-confidence vote over his budget measures, which include cuts to spending and lift taxes. French equities and bonds come under pressure on Wednesday amid the turmoil.
The premium on government borrowing hit its highest level since the eurozone's debt crisis of 2012. Barnier plans €60bn in savings, and aims to cut the deficit to 5% of economic output next year from more than 6% this year.
France's Senate will start examining the Budget legislation on Monday.
In equity news, shares in UK insurer Direct Line rocketed by 36% after news overnight that rival Aviva had tabled a £3.3bn offer – which was rejected. Aviva stock fell on the news.
Remy Cointreau fell as the drinks maker reported a 17.6% fall in half-year operating profit.
International Distribution Services shares were higher after a BBC report stated Czech billionaire Daniel Kratinsky's EP Group was close to finalising a deal to buy the parent company of Royal Mail after making extra concessions to get his offer accepted.
Reporting by Frank Prenesti for Sharecast.com