As German actions led the gains from the stock markets of Europe This Monday (24), after the country’s main conservative block, under the leadership of Friedrich Merz, beat the federal election of Sunday (23).
The Stoxx 600 index went up 0.22%, to 555.08 points, with the stocks of the real estate sector and the public services sector leading the earnings, with highs of more than 1.5% each.
The DAX German index jumped almost 1%, driven by arms manufacturers.
The actions of defense companies, including Rheinmetall, Hensoldt and Renk, advanced between 3.3% and 4.3% due to the prospects for higher military spending by the new government in Berlin. The aerospace European and defense index rose 0.9%.
Merz looked on his way to becoming Germany’s next chancellor after his group won Sunday’s election, although he faces long negotiations after the Germany’s far right party (AFD) to win a historic second place.
Prolonged coalition negotiations can delay the advancement of urgently necessary policies, including budget reforms and spending increases, to boost Europe’s largest economy after two consecutive years of contractions.
“What most worries investors is how long it will take to form a coalition,” said Lale Akoner, Etoro’s chief global market analyst.
“The market is still digesting the news and trying to understand whether pro-process policies can be implemented by the new coalition.”
The basic resources sector lost 0.7%, impaired by weaker metal prices due to fears of a global trade war due to the threats of US President Donald Trump to increase import tariffs.
