European stocks open higher in the wake of EU elections; Fiat Chrysler shares up 16%

Europe News

European Markets: FTSE, GDAXI, FCHI, IBEX

The pan-European STOXX 600 index was around 0.5% higher shortly after the opening bell, with all sectors and major bourses trading higher. Markets in the U.K. are closed on Monday due to a public holiday.

European investors will largely be focused on results of the EU parliamentary elections. Initial results suggested a strong showing for Liberal and Green parties, while euroskeptic groups in Britain and France holding the gains they saw in 2014.

Pro-EU parties are still expected to make up the majority of the Parliament, however, holding on to about two-thirds of the seats. But right-wing populist parties in both the U.K. and France made solid gains, with Nigel Farage’s Brexit Party comfortably beating Britain’s two main parties and Marine Le Pen’s National Rally narrowly beating President Emmanuel Macron’s centrist party.

The euro lost some ground against the dollar on Monday morning, trading just below $1.12 and trimming its earlier gains.

Looking at individual stocks, Fiat Chrysler surged to the top of the European benchmark after the automaker confirmed it had filed a proposal for a merger with French rival Renault. In a press release, Fiat Chrysler said the joint organization would produce estimated sales of 8.7 million vehicles a year and would be considered the world’s third largest car manufacturer.

Shares of Fiat Chrysler and Renault gained almost 16%, helping to lift Europe’s autos sector by 3.4%.

Elsewhere, trade tensions continued to be a focal point for investors. The billionaire founder of Chinese telecoms giant Huawei, Ren Zhengfei, told Bloomberg on Sunday that despite Beijing’s heated trade war with the U.S., he would oppose any Chinese retaliation against major rival Apple.

Meanwhile, U.S. President Donald Trump on Monday put pressure on Japan to have the balance of trade between the two countries “straightened out rapidly.” Trump has threatened to hit the country’s automakers with high tariffs.