Wall Street is expected to be mixed, but European stock markets are up mid-session Monday, with the results of the German federal elections and the absence of new bad surprises on the Evergrande file reassuring investors, while the uninterrupted rise in oil prices is pushing up energy stocks.

Futures on the major New York indices reported a rise of 0.28% for the Dow Jones and 0.03% for the Standard & Poor’s 500 but a drop of 0.32% for the Nasdaq.

In Paris, the CAC 40 gained 0.43% to 6,667.29 points around 10:40 GMT. In London, the FTSE 100 is up 0.21% and in Frankfurt, the Dax is up 0.59%.

The EuroStoxx 50 index is up 0.4%, the FTSEurofirst 300 up 0.15% and the Stoxx 600 up 0.06%.

In the wake of its narrow victory in the German parliamentary elections, the German Social Democratic Party (SPD) is beginning talks with the Greens and the Liberal Democrats of the FDP in an attempt to form a viable majority, but the negotiations could last several weeks, or even months.

Without waiting, the markets welcome the fact that the hypothesis of a left-wing government involving the SPD, the Greens and Die Linke has been completely ruled out.

“One of the important results of these elections is that the risky scenario of a ‘red-green-red’ coalition did not achieve a majority. Such an outcome would have resulted in high uncertainty on the markets,” explains Marco Willner, head of investment strategy at NN Investment Partners.

At the same time, investors remain on the lookout for news about Evergrande, but have found some temporary reassurance in the new liquidity injections made by the central bank to limit tensions in the banking system.


Third support for stocks: the continued rise in oil prices, for the fifth session in a row, as supply tensions combine with signs of recovery in global demand.

Brent crude gained 1.47% to $79.24 a barrel after hitting 79.52, its highest level since October 2018, and U.S. light crude (West Texas Intermediate, WTI) gained 1.43% to $75.04.

U.S. bank Goldman Sachs raised its year-end Brent price forecast to $90, ten dollars higher than before.


This increase logically benefits the European oil and gas sector, whose Stoxx index has risen 2.42%, the highest since mid-March. In Paris, TotalEnergies gained 3.01%, Vallourec 5.16%, TechnipFMC 5.17%.

At the top of the Stoxx 600, Rolls-Royce (+10.19%) benefited both from the raising of the price target of Morgan Stanley, the award of a contract to power the fleet of B52 bomber of the U.S. Air Force and a press report mentioning an agreement for the sale of the subsidiary ITP Aero for 1.5 billion pounds.

German real estate group Vonovia is up 3.86%, as Sunday’s national election results outweighed a victory in a local referendum in Berlin for supporters of housing expropriations to limit rent increases.

On the downside, Plastic Omnium dropped 1.11% after cutting its annual earnings forecast due to the impact of the semiconductor shortage on global automotive production.


In the bond market, the outcome of the German parliamentary elections only briefly relieved investors and yields quickly rose again, caught up in the prospect of tighter monetary policies.

The 10-year German Bund, which had fallen to -0.242% at the start of the session, gained nearly two basis points to -0.209%, the highest since July 6. Its French equivalent is at its highest since July 1 at 0.143%.

The U.S. 10-year is up even more sharply at 1.4871%, again a three-month high, continuing its momentum from last week (+9 basis points in five sessions).


The rise in Treasuries yields once again benefited the dollar, which appreciated against the other major currencies (+0.07%) after losing ground earlier in the day.

This rebound brings the euro around 1.17 dollars against more than 1.1725 at the beginning of the day.