FX.co ★ European Stocks Close Lower As Political Concerns Weigh

### European Stocks Close Lower on Political and Economic Concerns

European stocks faced a downturn on Monday, largely influenced by political anxieties following French President Emmanuel Macron's call for snap legislative elections in June. This decision comes after the recent European Union elections highlighted a significant shift towards right-wing and far-right parties.

Additionally, investor sentiment was cautious due to upcoming significant economic events, including the Federal Reserve's monetary policy announcement and crucial U.S. consumer price inflation data expected later in the week.

#### Market Indices Performance

- **Pan-European Stoxx 600**: Declined by 0.27%

- **U.K.'s FTSE 100**: Dropped by 0.2%

- **Germany's DAX**: Decreased by 0.34%

- **France's CAC 40**: Fell significantly by 1.35%

- **Switzerland's SMI**: Lost 0.95%

Other European markets, including Austria, Belgium, Finland, Ireland, Norway, Portugal, Russia, Spain, Sweden, and Turkey, also closed on a weaker note. Conversely, Denmark and the Netherlands managed to edge higher, while Greece, Iceland, and Poland ended flat.

#### Sector-Specific Movements in Major Markets

**United Kingdom**

- **Declines**: Rentokil Initial, Diploma, Admiral Group, Convatec Group, Smith (DS), Diageo, Smurfit Kappa Group, Haleon, Croda International, Reckitt Benckiser, Ocado Group, NatWest Group, and BT Group dropped by 1.6% to 3%.

- **Gains**: M&G rose nearly 2.5%, with Rolls-Royce Holdings, BP, Ashtead Group, Hargreaves Lansdown, Glencore, Standard Chartered, and Pershing Square Holdings also posting gains.

**Germany**

- **Declines**: Porsche, Bayer, RWE, Covestro, Commerzbank, BASF, Puma, Fresenius Medical Care, and Deutsche Boerse fell between 1% and 2.5%.

- **Gains**: Siemens Energy, Sartorius, and MTU Aero Engines ended the day with sharp gains.

**France**

- **Significant Declines**: Societe Generale plummeted by more than 7%, while Edenred fell approximately 6.5%. Other notable losers included Vinci, BNP Paribas, Credit Agricole, Engie, Bouygues, Saint Gobain, Hermes International, AXA, LVMH, Carrefour, and Veolia, all of which decreased by 2% to 5.5%.

### Economic Insights

- **Euro Area**: Investor sentiment in the euro area continued to recover in June, reaching its highest level since early 2022, although the pace remained sluggish due to the economic impact of the ongoing war in Ukraine, as revealed by a closely observed survey. The economic confidence index rose to +0.3 in June from -3.6 in May, surpassing forecasts which had expected a negative reading of -1.5, according to behavioral research institute Sentix.

- **United Kingdom**: A report by S&P Global indicated a decline in UK permanent staff appointments for the twentieth consecutive month in May, albeit at the slowest pace since March 2023. The KPMG/REC Report on Jobs attributed the drop in recruitment activity to delayed decision-making and a lack of demand among companies.

By presenting these comprehensive insights, we provide a clearer understanding of the various factors influencing the European stock markets and the broader economic landscape.