(Reuters) – European shares were largely unchanged on Monday, while Germany’s benchmark index rose as investors greeted the widely expected victory of Friedrich Merz-led opposition conservatives at the national election.
The pan-European STOXX 600 index was down 0.1% as of 0810 GMT, led by a decline in basic resources due to lower metal prices.
Germany’s benchmark index added 0.4%, boosted by arm makers.
Defence stocks Hensoldt, Rheinmetall and Renk advanced between 1% to 2.8% after Germany’s conservatives won the national election as expected.
The euro pared some early gains to last trade 0.25% higher at $1.0485.
Merz, who is set to become Germany’s next chancellor, will navigate protracted coalition talks where he may need one or multiple partners to form a government.
Prolonged coalition talks could delay Germany’s urgently needed policies, including budget reforms and spending increases, to revive Europe’s largest economy after two consecutive years of contraction.
European aerospace and defence index, which been has on a tear due to prospects of higher military spending, led the sectoral gains with a 1.1% rise.
Countering gains, engineering company Siemens Energy tumbled 11% and electrical equipment maker Schneider Electric lost 5%.
Saipem rose 3.8% after the Italian oil services company said on Sunday that it will merge with Norwegian rival Subsea 7 in a deal valued at about $4.63 billion.
(Reporting by Nikhil Sharma; Editing by Eileen Soreng)
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