EUROPE MARKETS: European Stocks Rise, Take Lead From U.K. After Surprise Election Result

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Stoxx Europe 600 still on track for weekly decline

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The major European stock benchmarks rose Friday, as U.K. stocks gained on a slide in the pound after the surprise U.K. general election result.

The FTSE 100 in London advanced 0.5% to 7,484.06, although the blue-chip index was tracing back from gains of more than 1% made earlier in the session.

Elsewhere in Europe, Germany's DAX 30 moved up 0.3% to 12,758, and France's CAC 40 tacked on 0.2% at 5,275.68. For the week, the Stoxx Europe 600 was on track to fall 0.8%.

The session got underway with the pound tumbling to a seven-week low below $1.27, after Britain's general election left the country facing a "hung parliament," where no single party has a majority.

See:U.K. election -- So what is a hung parliament? (http://www.marketwatch.com/story/uk-election-so-what-is-a-hung-parliament-2017-06-08)

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A weak pound can make shares of multinational companies listed on the FTSE 100 more attractive, as it can help boost their sales by easing selling prices. Among such companies, shares of luxury goods maker Burberry Group PLC (BRBY.LN) popped up 2.3%, while building materials supplier CRH PLC rose 1.9%.

But domestically focused U.K. stocks were hit hard after the election result. That helped hold back the broad-based Stoxx Europe 600 , which edged up less than 1 point to 389.20.

Of the U.K. stocks on the pan-European benchmark, property developer Berkeley Group Holdings PLC (BKG.LN) suffered a 4.3% loss, Metro Bank PLC (MTRO.LN) fell 4%, and retailer Next PLC (NXT.LN) moved 3.3% lower.

"Whilst the pound's weakness is allowing some U.K. stocks to bounce this morning, it's hardly an assured move and less can be said of sterling which remains out of favor with investors," said Ed Anderson, head of research at FxPro, in emailed comments.

"Any meaningful recovery is hard to see until the political picture becomes clearer," he said.

Read: 'Worst possible outcome' -- analysts react to U.K. early election results (http://www.marketwatch.com/story/worst-possible-outcome-analysts-react-to-uk-early-election-results-2017-06-08)

(END) Dow Jones Newswires

June 09, 2017 05:07 ET (09:07 GMT)