EUROPE MARKETS: European Stocks End Higher In Wake Of German Political Turmoil

By Carla Mozee and Victor Reklaitis, MarketWatchFeaturesDow Jones Newswires

Merkel says she would prefer a new election over a minority government

European stocks finished higher Monday, with German equities recovering following the collapse of talks to form a coalition government for the eurozone's largest economy.

Continue Reading Below

What markets are doing: In Frankfurt, the DAX 30 index rose 0.5% to end at 13,058.66, turning around from a decline of 0.5%.

France's CAC 40 was up 0.4% to close at 5,340.45, and the U.K.'s FTSE 100 edged up 0.1% to end at 7,389.46.

The Stoxx Europe 600 tacked on 0.7% to finish at 386.39.

The euro bought $1.1741 after hitting an intraday low of $1.1723 and an intraday high of $1.1809. The shared currency late Friday in New York fetched $1.1793. Against the pound, the euro traded hands at GBP0.8864 versus GBP0.8923 on Friday.

What's moving markets: Stocks started in the red after talks to form a "Jamaica" governing coalition of parties in Germany broke down. On Sunday, the pro-business Free Democratic Party ended talks about forming a coalition government ( with Merkel's Christian Democratic Union and the center-left Greens.

But German equities started to turn higher and the euro came off session lows against the U.S. dollar following a Monday report that the FDP said it would support a minority government. German President Frank-Walter Steinmeier urged the political parties ( to return to the negotiating table, rather than calling new elections.

The breakdown in talks puts Merkel's fourth term as chancellor in doubt, as well as raising the prospect of a minority government and perhaps eventually a new general election if the situation can't be resolved. Merkel late Monday said she would prefer a new election ( over a minority government.

What strategists are saying: "The DAX saw major volatility today after the coalition talks in Germany ended badly," said David Madden, a CMC Markets UK analyst, in a note.

"This casts doubt over the future of German politics, as Angela Merkel's Christian Democratic Union party may be forced to form a minority government or call another general election."

"The Germany equity market made a remarkable swing from negative to positive in the day, and the slide in the euro helped it," Madden added.

Stock movers: Altice NV (ATC.AE) shares jumped 5.2% after the French telecom said it has no plans to raise capital ( The company recently announced a management shake-up ( the wake of disappointing third-quarter results and a slide in its share price.

RWE AG (RWE.XE) rose 2.8% following a Reuters report over the weekend that the German utility is considering ways to cut its stake of EUR16.8 billion ($19.8 billion) in its Innogy retail business ( One option includes doing a deal with Italy's Enel (ENEL.MI), the report said.

NEX Group PLC (NXG.LN) fell 0.8%, but was off session lows, as the financial trading company cut its interim dividend ( and said profit fell in the first half of fiscal 2018.

Mediclinic International PLC (MDC.LN) fell 3.1% after the private hospital company said it's ditching plans to make an offer ( to buy Spire Healthcare Group PLC (SPI.LN). Spire shares fell 8.4% on the midcap FTSE 250 index.

Roche Holding AG (ROG.EB) jumped 5.9% after the drugmaker outlined positive results ( from two major late-phase trials: one for its hemophilia treatment Hemlibra and the other for Tecentriq, a cancer therapy.

(END) Dow Jones Newswires

November 20, 2017 12:15 ET (17:15 GMT)