HONG KONG (AP) — Asian stocks fell but European shares rose on Monday after France’s election results left parliament split between the left, center and far right with no party coming close to a majority.
The CAC-40 index of large companies recouped early losses to rise 0.8% to 7,735.17.
Analysts say the market’s biggest fear was that either the left-wing National Front or Marine Le Pen’s anti-immigration National Rally would win a majority. Both parties have pledged to boost spending, raising concerns that France’s already huge budget deficit could balloon. That has already sparked a sell-off in French government bonds.
While that outcome was averted, France faces uncertainty over the coming weeks after Prime Minister Gabriel Attal announced his resignation. None of the major political forces in Parliament will have a clear majority to back a new government, making it likely that the new administration will have a hard time passing legislation or making tough spending choices to prevent the national debt and deficit from getting out of hand.
“The fact that the left has become the strongest group in parliament raises serious concerns,” said Holger Schmieding, chief economist at Berenberg Bank. “France is heading into a period of political uncertainty, possibly heading towards fiscal challenges and the reversal of some of President Emmanuel Macron’s pro-growth reforms.”
The euro rose to $1.0841 from $1.0836 on Monday.
Elsewhere in Europe, Germany’s DAX index rose 0.7 percent to 18,598.84, while London’s FTSE 100 index added 0.2 percent to 8,217.77.
In Tokyo, official data showed real wages fell 1.4% in May from a year earlier, the 26th consecutive month of declines, while the Nikkei stock average fell 0.3% to 40,780.70 as a weaker yen and rising raw material prices pushed up import costs. Nominal wages rose 1.9%.
Hong Kong’s Hang Seng Index fell 1.6% to 17,524.06, while the Shanghai Composite Index lost 0.9% to 2,922.45.
Australia’s S&P/ASX 200 fell 0.8% to 7,763.20 and South Korea’s KOSPI lost 0.2% to 2,857.76.
Futures for the S&P 500 fell less than 0.1%, while the Dow Jones Industrial Average rose 0.1%.
US stocks on Friday A long-awaited report In the job market.
On Friday, the S&P 500 rose 0.5% to 5,567.19, its third straight day of record highs following Thursday’s Independence Day holiday break. The index has already set 34 records this year and is up nearly 17%, but is still just over halfway there.
The Dow Jones Industrial Average rose 0.2%, to 39,375.87, and the Nasdaq Composite added 0.9%, to 18,352.76.
In the bond market, the move was more decisive. Treasury yields fell following the U.S. employment report. Companies hired more workers last month than economists expected, but the job gains still slowed from May’s. Moreover, the unemployment rate unexpectedly rose, worker wage growth slowed, and the U.S. government said last month’s employment numbers were lower than previously indicated.
Overall, the data reinforced Wall Street’s belief that U.S. economic growth is slowing under the weight of high interest rates, which is exactly what investors want because the slowdown is Keeping inflation in check and, The Federal Reserve begins cutting interest rates It cut key interest rates from their highest levels in 20 years.
In other trading on Monday, benchmark U.S. crude oil fell 64 cents to $82.52 a barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international standard, fell 47 cents to $86.07 a barrel.
The U.S. dollar rose to 161.00 yen from 160.72 yen.
