European stocks are mixed on Monday, with France ‘s major stock index under pressure, as polls predict a tight race between President Emmanuel Macron and his far-right challenger Marine Le Pen in the final round of presidential elections. . With 93% of the results counted, the president and candidate for re-election, Emmanuel Macron, and the far-right candidate Marine Le Pen will dispute the presidency of France in the second round on April 24.
The Euro Stoxx 50 is trading up 0.10%. The French CAC 40 rises almost 1%, the German DAX falls 0.3%, the British FTSE 100 falls 0.4%; the FTSE MIB is trading 0.4% higher.
The partial results on Sunday placed Macron in first place ahead of Le Pen after the first round of voting, although the LFOP pollsters predicted a very close second round on April 24, with 51% for Macron and 49% for Lepen.
French assets have recently underperformed as investors priced in the possibility of a Le Pen victory. Although the French far-right no longer advocates leaving the euro, the markets are uncomfortable with her program of economic protectionism, tax cuts and nationalizations.
In any case, the election is not the only thing that worries. The markets face a short but intense week , with factors such as the war in Ukraine, the new wave of the pandemic in China; the “unofficial” start of the quarterly earnings season on Wall Street or the meeting of the Governing Council of the ECB, keeping investors on the alert who are beginning to rotate their portfolios, increasing their positions in more defensive sectors in the face of a macro scenario complex, which can end up resembling what is known as stagflation, that is, high inflation and low economic growth.
As for Ukraine, the war escalates again with Russia’s attacks in eastern Ukraine. This Monday the Austrian chancellor, Karl Nehammer, could meet with the Russian president, Vladimir Putin. Everything indicates that Russia could have changed its strategy and now its main objective is to consolidate its positions in the Donbass region, which includes the two pro-Russian regions, and in Crimea, which may lead to strong localized battles in the Ukrainian army. A conflict that remains entrenched with a very low possibility of reaching a peace agreement.