European markets firm, confident on reforms despite vote shock

PARIS, May 26 (AFP): European stocks rose firmly, and the euro and sterling steadied after an initial wobble on Monday despite nationalist shocks in European elections, with traders saying that economic reforms will continue.
On the crucial market where eurozone countries borrow to finance their debt, sentiment appeared serene.
There was strong demand from investors to buy bonds issued by southern European countries hardest hit by the state of their finances and by the hardship of reforms, but which are now recovering.
Bond strategist Nordine Naam in Paris commented: "The (composition of) the European parliament will not change really... There was an anti-Europe message notably in France and Greece, but that is not the case across Europe and the market is taking account of the overall outcome."
The euro, which had opened slightly down affected by weak data for the German economy on last Friday, steading to $1.3639 from $1.3632 late on last Friday. The euro rose to 139.02 yen from 138.91.
The dollar was steady at 101.93 yen from 101.91.
Sterling was steady at 80.97 pence to the euro and firmed to $1.6844.
Markets in London were closed for a holiday, but Italy led European stock markets in a robustly positive reaction to the election outcome overall.
The Italian FTSE Mib index leapt ahead in Milan by 3.04 per cent in morning trading to 21,377 points, led by banking shares.
Traders there said that sentiment had been boosted by an unexpectedly strong election showing on Sunday by the Democrat Party of reformist Prime Minister Matteo Renzi.
In Frankfurt, the main German DAX index opened with a gain of 0.60 per cent to 9,826.91 points.
And in Paris, where the far right and anti-EU National Front made a big breakthrough, the CAC 40 index gained 0.45 per cent to 4,513.51 points.
On the debt market, the borrowing rate indicated by Italian 10-year bonds fell to 3.010 per cent from 3.155 per cent, and the Spanish rate fell to 2.911 per cent from 2.986 per cent, while the Portuguese rate or yield fell to 3.670 per cent from 3.764 per cent.
And the Greek rate fell to 6.205 per cent from 6.492 per cent.
"Eurosceptic parties are the big winners and their victories in France and Britain weaken Europe overall," said Credit Mutuel CIC analysts.