Europe stocks rebound despite jitters over French elections

President Emmanuel Macron threw markets into turmoil by calling the snap legislative polls after his centrist party was trounced by National Rally in European Parliament elections two weeks back

European stock markets rebounded on Monday despite jitters over the first round of French elections taking place this weekend.

European markets are in recovery mode, with widespread gains taking shape, said Scope Markets analyst Joshua Mahony.

Despite ongoing concerns around this weekend's French parliamentary election, French stocks are on the rise as investors buy the dip that saw the CAC drop nearly 10% in a month, he added, referring to the Paris benchmark stock index CAC 40.

President Emmanuel Macron threw markets into turmoil by calling the snap legislative polls after his centrist party was defeated by the far-right National Rally (RN) in European Parliament elections two weeks back.

Certain opinion polls showed the RN garnering 35-36% of voting intentions for Sunday's first round, ahead of a left-wing alliance and Macron's centrists, who were in third place. The second round will be held on July 7.

The positive tone being taken by European markets could yet come into question as we get closer to this potential seismic shift in French politics, Mahony added.

Investors meanwhile set aside a key survey showing that German business sentiment unexpectedly dropped in June, pouring cold water on hopes Europe's largest economy is on course for a strong bounce back.

Today's results add to the growing stream of indicators sending mixed signals on where the eurozone's largest economy is heading, according to Oxford Economics analyst Mateusz Urban.

Investors are also tracking developments in Japan as the yen struggles against the dollar, leading the country's top currency official to caution that authorities were prepared to step in to provide support as the currency hovers near three-decade lows.