EU stocks open up positive after election results allay investor fears

The European stock market enjoyed a positive open this morning after EU election results failed to show a surge in populist right-wing parties.

Euro Stoxx is up 0.30 per cent at the time of writing, while the FTSE has enjoyed a 0.65 per cent bounce. The French Cac and German Dax are up 0.17 per cent and 0.47 per cent respectively. The FTSE 100 is closed for the bank holiday Monday.

Sterling was last trading near a one-week high at $1.2733, staying firm after the results were widely anticipated in a number of polls in the lead-up to the election. 

Read more: Brexit party storms ahead in EU elections as voters shun Labour and Tories

Meanwhile, Spanish, French and Portuguese bond yields are trading up after the gains made by far right parties failed to result in a landslide. Spanish 10-year bond yields are just above +0.82 per cent, while the Portuguese equivalent is at +0.976 per cent. In France, the 10-year OAT yield has dipped to +0.278 per cent. The Euro also rallied overnight as the results that came in were better than investors feared.

Overall, the nationalist, anti-EU parties made gains, but not enough to overthrow the establishment parties. Nationalist parties performed well in the UK, France and Italy. In the UK, Nigel Farage's Brexit party took nearly a third of the vote; in France, Le Front national leader beat the staunchly pro-EU president Emmanuel Macron, while in Italy, deputy prime minister Matteo Salvini topped the polls and won nearly 35 per cent of the vote.

Read more: Michael Gove becomes eighth Tory MP to officially join leadership race

Establishment parties were not decimated but they did suffer defeats, for example in Germany, where chancellor Angela Merkel's Christian Democrats and coalition partner, the Social Democratic Party (SPD), lost votes to the Greens, who came second.

Pro-EU parties have kept their majority, but it has been slimmed down.