LONDON: Stock markets in Europe and the euro currency held their own Monday despite political uncertainty in Germany after talks on forming a new government collapsed stoked talk of new elections. With the U.S. heading into a long holiday weekend, trading volumes this week is expected to be relatively modest.
KEEPING SCORE: In Europe, Germany’s DAX was up 0.3 percent at 13,026 while France’s CAC 40 rose 0.3 percent to 5,333. Britain’s FTSE 100 index of leading British shares was 0.2 percent higher at 7,394. U.S. stocks were heading for a tepid open, with Dow futures and the broader S&P 500 futures down 0.1 percent.
GERMAN UNCERTAINTY: Germany faces an uncertain political future after the collapse of weeks of talks on forming a new government, with Chancellor Angela Merkel set to consult the country’s president and the possibility of new elections looming. Germany’s Sept. 24 election produced an awkward result that left Merkel’s two-party conservative bloc seeking a coalition with the pro-business Free Democrats and the traditionally left-leaning Greens. The combination of ideologically disparate parties hadn’t been tried before in a national government, and came to nothing when the Free Democrats walked out of talks Sunday night.
EURO WOBBLED: In the immediate aftermath of the news, Europe’s single currency endured a knee-jerk sell-off but that didn’t last long with most economists skeptical about whether the developments in Germany will curtail the economic recovery in the continent’s biggest economy. In early afternoon trading, the euro was down only 0 .1 percent at $1.1782.
