European shares muted as investors eye French political upheaval

Investing.com - European stocks were subdued on Friday, as investors gauged developments in France’s ongoing political crisis.

By 04:22 ET (08:22 GMT), the pan-European Stoxx 600 was unchanged, while the FTSE 100 index in the United Kingdom and DAX in Germany had dipped by 0.1%.

The CAC 40 in France, meanwhile, edged up by 28 points, or 0.4%. French President Emmanuel Macron has set a deadline for today to name his sixth pick for Prime Minister in just under two years, following the collapse of a previous government under previous -- and short-lived -- premier Sebastien Lecornu.

Bank of France Governor Francois Villeroy de Galhau warned that the upheaval will likely cost France -- Europe’s second-largest economy -- at least 0.2 percentage points of growth and could increasingly sap both business and consumer confidence.

Markets will be keeping close tabs on the situation, he told a French radio station.

In individual stocks, German wind and solar park developer Energiekontor slumped by more than 17% after it slashed its outlook for annual income.

Elsewhere, shares of Stellantis climbed in Milan trading after the carmaking giant reported that third-quarter global vehicle shipments jumped by 13% from a year ago. The announcement gave some lift to the broader European automobiles sector.

BNP Paribas and Commerzbank were among the gainers in Eurozone banks, helping push the index tracking the segment up by 0.7%.

The advance partly offset a slip in healthcare names, which were weighed down by declines in industry titans like AstraZeneca and Novo Nordisk.

Gold slides below $4,000

Gold retreated below the $4,000-an-ounce level on Friday as improving risk appetite, off the back of an Israel-Hamas ceasefire, spurred some profit-taking. 

The deal, which was brokered by U.S. President Donald Trump, was approved by Israel’s government on Friday, and may clear the way for the stoppage in the two-year old war in Gaza. Easing geopolitical tensions could diminish a part of the allure of gold, which is traditionally viewed as a safe haven during times of economic or political uncertainty.

Bullion prices logged steep overnight losses, with strength in the dollar also weighing on wider metal prices. Some emerging doubts over the trajectory of U.S. interest rates, coupled with a slide in the Japanese yen and the euro, have supported the greenback this week. 

Spot gold had edged up by 0.3% to $3,988.00 an ounce in European trading, while gold futures for December rose 0.2% to $3,998.72/oz by 04:34 ET. Spot prices exceeded $4,000/oz for the first time ever this week.

Meanwhile, oil prices dropped, extending losses from the prior session, as the Israel-Hamas news hit the market’s risk premium.

Brent crude futures were down by 0.5% to $64.88 per barrel and U.S. West Texas Intermediate crude had fallen 0.4% to $61.24 a barrel by 04:36 ET.