Europe close: Stocks rise, but Polish markets surge after election

(Sharecast News) - European stock markets closed with gains on Monday despite some weakness in the heavyweight pharmaceutical sector, but Polish equities outperformed after a dramatic weekend election vote. The Stoxx 600 Index finished up 0.23% at 450.2p, with modest gains across London, Paris, Frankfurt and Madrid.

Polish stocks were outperforming the wider continent with Warsaw's WIG Index jumping over 4% after Poland's right-wing ruling party, Law and Justice, failed to win a parliamentary majority.

The result paves the way for a pro-EU coalition led by Donald Tusk, former prime minister and head of the European Council, with the final result not expected until Tuesday evening.

"We won democracy, we won freedom, we won our free, beloved Poland," Tusk said. "This day will be remembered in history as a bright day, the rebirth of Poland."

Elsewhere, it was a relatively quiet day on European markets amid a dearth of economic data, as investors continued to assess the potential impact from the ongoing way in Gaza, with Israeli forces expected to start a ground offensive within the next 24 hours.

"For now, the focus is on whether we see an escalation of the conflict along Israel's Northern border with Lebanon as well as whether Iran pursues any direct involvement," said analyst Manoj Ladwa at ARJ Capital.

Oil prices pulled back after a strong rise at the end of last week, with Brent crude falling 1.1% to $89.93 a barrel.

"While stocks have come back in risk-on mode after a choppy week, oil prices have trimmed some of Friday's gains," said analyst Chris Beauchamp at IG. "However, the risk to oil supplies cannot be entirely discounted even if the conflict spreads no further - traders will be jumpy regarding any headlines containing 'Iran'."

Pharma down on Pfizer readacross

Shares in European listed pharma giants GSK, Genmab, Novartis and Roche were struggling after American peer Pfizer on Friday slashed its revenue guidance for the full year, citing lower-than-predicted sales of its Covid-19 vaccine. The company also said it would embark on a cost-cutting programme to save $3.5bn annually by next year, which includes layoffs.

French IT group Atos finished higher on the news that its chairman Bertrand Meunier was stepping down after mounting pressure from shareholders who called for his removal. The stock initially surged 17% in early deals, but temporarily slipping into the red; but a late jump saw shares close up 6%.

In Warsaw, banking stocks such as Pekao and PKO BP were among the strongest risers after the weekend's elections.