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(Alliance News) - Stocks in Europe were having a mixed day on Monday, with the FTSE 100 feeling the weight of a poor UK GDP reading, but the CAC 40 in Paris gaining as investors in France show confidence in President Emmanuel Macron - as he looks set to extend his time in office.
"It's a difficult time to be an investor given how markets stubbornly refuse to break out into a decent rally. So far this year we've had enough ups and downs to make anyone owning shares and bonds travel sick," said Danni Hewson, financial analyst at AJ Bell. "The new trading week got off to another mixed start, with markets initially down across Europe and Asia before some territories managed to make positive progress."
The FTSE 100 index was down 28.19 points, or 0.4%, at 7,641.37 midday Monday. The mid-cap FTSE 250 index was down 30.46 points, or 0.1%, at 21,143.86, while the AIM All-Share index was up just 0.76 of a point at 1,056.65.
The Cboe UK 100 index was down 0.2% at 760.94. The Cboe 250 was up 0.1% at 18,608.34, and the Cboe Small Companies down 0.2% at 15,460.91.
In mainland Europe, the CAC 40 in Paris was up 0.7%, while the DAX 40 in Frankfurt was down 0.4%.
Macron and his far-right rival Marine Le Pen were on Monday preparing for two weeks of tough campaigning after they reached a run-off of presidential elections that promises to be far tighter than their encounter five years ago.
With 97% votes counted, Macron came in first in Sunday's first round of voting with 27.6% of the vote. Le Pen was second with 23.4%. As the top two finishers, they advance to a second round on April 24.
Despite entering the campaign late and holding just one rally, Macron performed slightly better than expected and won immediate support from most of his defeated rivals ahead of the run-off.
Victoria Scholar, head of Investment at interactive investor, said: "In terms of the markets, Macron is clearly the most market friendly candidate thanks to his passion for European unity and his determination to help bring the war in Ukraine to an end. Meanwhile Le Pen's extreme right views and some shady ties to Moscow would create uncertainty that would deeply unnerve financial markets if she were to prevail in the second round."
The euro was also rallying on the expectations of another Macron presidency. The single currency was priced at USD1.0918, up from USD1.0875 on Friday night.
Investment bank Societe Generale was also helping the CAC's rising, advancing 6.7%, after agreeing to cease its activities in Russia and sell its majority stake in Rosbank.
The move comes weeks after Ukraine's leader urged French firms to leave over Moscow's invasion of his country.
Societe Generale said in a statement that its withdrawal from Russia would cost it EUR3.1 billion.
It also announced "the signing of a sale and purchase agreement to sell its entire stake in Rosbank and the group's Russian insurance subsidiaries" to Russian investment firm Interros Capital.
The pound was quoted at USD1.3045 around midday Monday, rising from USD1.3020 at the London equities close on Friday, and rebounding sharply after sliding to USD1.2990 following a disappointing UK GDP release.
The UK economy failed to live up to expectations in February, with growth almost slowing to a standstill.
GDP grew by 0.1% month-on-month in February, slowing from 0.8% growth in January, and coming in behind market consensus - according to FXStreet - for 0.3% growth.
The Office for National Statistics did note, however, that the UK economy is now 1.5% above its pre-coronavirus level in February 2020.
In London, tech stocks were on the back foot following a market rout in Asia. Scottish Mortgage Investment Trust gave back 2.3%, while Ocado was down 2.0%. The Hang Seng index in Hong Kong lost 3.1% on Monday.
AJ Bell's Hewson said: "These market moves suggest investors are worried about rising interest rates as that makes highly rated stocks - as seen in the tech space - less appealing as it reduces the value of future cash flows.
"Investing in tech has been about backing companies with prospects for strong growth in the future, but that future growth would be worth less if rates go up. Investors are now less willing to pay high ratings to own these types of stocks and once again you're seeing a shift in preference towards value stocks, which are offering jam today rather than jam tomorrow."
FTSE 100-listed grocer Sainsbury was up 1.3% after stockbroker Jefferies raised its recommendation for the company to 'buy' from 'hold'. In the midcaps, John Wood gained 10% after Jefferies pushed it to 'hold' from 'underperform'.
Ascential advanced 2.4%. The London-based business-to-business media and events firm confirmed it is actively discussing "the merits" of separating some of its assets.
"As discussions are exploratory at this stage, they may or may not lead to the board making a decision to undertake a managed separation of these businesses in due course. The board is committed to open and transparent engagement with all of its stakeholders and will communicate further if and as appropriate," the company added.
This followed Sky News reporting on Saturday that Ascential was looking at demerging its digital operations and listing them separately in the US.
In London's junior market, Scancell surged 30% after the cancer immunotherapies developer said its phase 1/2 clinical trial with Modi-1 has opened for recruitment.
Modi-1 is a cancer vaccine for the treatment of solid tumours. The name of its clinical trial is ModiFY. The Nottingham, England-based firm said oncology clinical research sites and investigators across the UK have agreed to contribute patients to the ModiFY study.
The first clinical sites are open for recruitment, and the company expects up to 20 sites to be open and recruiting "in due course." Scancell noted that the UK's Medicines & Healthcare Products Regulatory Authority also approved a protocol amendment, that is aimed at accelerating patient recruitment and shortening study timelines.
Stocks in New York were pointed to a muted open on Monday. The Dow Jones Industrial Average was called down 0.1%, the S&P 500 down 0.4%, and the Nasdaq Composite down 0.8%.
Twitter was trading 2.7% lower in pre-market trading after news broke that Tesla Chief Executive Elon Musk will no longer be joining the board of the social media company.
The decision comes less than a week after announcing that Musk would be appointed. Musk was named to join the Twitter board after buying a major stake in the firm and becoming its largest shareholder.
"Elon's appointment to the board was to become officially effective 4/9, but Elon shared that same morning he will no longer be joining the board," Twitter Chief Executive Parag Agrawal tweeted. "I believe this is for the best."
Against the yen, the dollar was trading at JPY125.48 in London, up from JPY124.33.
Brent was quoted at USD99.36 a barrel on Monday midday, down from USD101.33 a barrel Friday evening. Gold stood at USD1,954.90 an ounce, up against USD1,945.10 late Friday.
By Paul McGowan; paulmcgowan@alliancenews.com
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