Europe midday: Germany in focus; Rolls-Royce secures ITP Aero sale
German shares were in focus on Monday as investors eyed moves to form a coalition after the country’s national election as the chances of a left-wing government faded.
The DAX index was up 0.93% to lead gains among regional bourses, while the pan-European Stoxx 600 index increased 0.07% in early trade.
The centre-left Social Democrats are trying to form a government after narrowly winning their first national election since 2005. The party is seeking an alliance with the Greens and the liberal Free Democrats in what has been called the “traffic light” coalition.
Preliminary results showed the Social Democratic Party gaining the largest share of the vote with 25.8%. Angela Merkel’s right-leaning bloc of the Christian Democratic Union and Christian Social Union was seen with 24.1% of the vote.
However, coalition negotiations, which could start on Monday, are likely to take weeks or even months.
In the UK, the petrol crisis also forced the government to suspend competition law to help oil companies to work together to deliver fuel to petrol stations that are running dry.
In equity news, Rolls-Royce shares soared to the top of the Stoxx, up 10.37%, after the aerospace engineer won a 30 year £1.9bn contract to supply parts for B-52 US Air Force bombers and also announced the £1.5bn sale of its Spanish ITP Aero division.
Shares in serviced offices company IWG gained 5.2% on reports it is exploring a multibillion pound break-up that would involve splitting it into several distinct companies.
Spain’s Cellnex Telecom slid almost 4% after Citigroup downgraded the stock to 'sell', citing valuation concerns.