European stocks closed higher on Monday on the back of E.U. parliamentary elections results and carmaker Renault surged as talk of a merger with Fiat Chrysler took a step further to being cemented.
Germany’s DAX edged higher and closed at around 0.5% on the upside as France’s CAC gained 0.3%.
In Italy, the FTSE MIB rose 0.6% before falling during the afternoon session. This followed reports that Brussels was considering sanctions due to Rome’s inability to control public debt.
Elsewhere U.K. and U.S. markets remained closed on Monday, which saw reduced trading volumes.
Investors across the Atlantic have largely been focused on parliamentary elections, whose results indicate the Liberal and Green parties had a strong outing. It was also the same for eurosceptic parties in Britain and France, with results showing that the groups have held the gains seen during the 2014 elections.
But pro-EU parties should still be able to take up the lion’s share of the seats in the E.U. Parliament, expected to be about two-thirds of all available seats.
In the U.K., Nigel Farage’s Brexit Party won comfortably against the two major parties in Britain. The same was witnessed in France where Marine Le Pen’s National Rally party just edged out President Emmanuel Macron’s party.
The auto sector rose early 1.5%, with much of the boost coming from the news that automakers Fiat Chrysler Automobiles and Renault are likely to merge.
French carmaker surged 12%, the biggest gain among autos, which saw it top the European benchmark. Fiat shares also rose, gaining by a healthy 8%. In the morning, Fiat Chrysler confirmed the merger talks and said the two companies would have combined annual sales of up to 8.7 million vehicles.
The Renault/FCA merger news saw the shares of competitor Peugeot Citroen fall by more than 3% to become the worst performing auto sector stock in Europe.
The euro trimmed earlier gains made on Monday, which saw the currency trade at $1.12 to the dollar.