European Shares Mixed After Italy Vote

European stocks traded mixed on Monday after having suffered heavy losses last week on worries about an economic downturn.

A renewed selloff in British gilts pushed euro zone yields higher after Britain’s new chancellor Kwasi Kwarteng announced a sweeping package of tax cuts.

Investors were also digesting the victory of a right-wing bloc led by Giorgia Meloni in Italy’s parliamentary elections on Sunday.

In economic releases, the Ifo institute said its business climate index fell to 84.3 from 88.5 in August, with both the current assessment component and expectations dropping significantly.

Expectations are now at their lowest level since the financial crisis as a result of high inflation and concerns over its implications on corporate costs and consumer demand.

The pan European Stoxx 600 dipped 0.3 percent to 389.10 after plunging 2.3 percent on Friday.

The German DAX and France’s CAC 40 index both edged up around 0.1 percent, while the U.K.’s FTSE 100 was down 0.6 percent.

Iberdrola declined 1.5 percent. The Spanish utility has reportedly hired Barclays to sell up to 49 percent in a portfolio of Spanish renewable power projects.

German utility RWE dropped 1 percent. The company has entered into an agreement with Abu Dhabi National Oil Company (ADNOC) on liquefied natural gas (LNG) supplies.

BP Plc and Shell both were down around 1 percent in London as oil extended Friday’s losses on fears of lower fuel demand from an expected global recession.

Housebuilders Barratt Developments, Taylor Wimpey and Persimmon fell 3-5 percent on concerns that interest rates will rise a lot more than expected earlier.

Sainsbury was marginally higher after the supermarket chain said that it is no longer in discussions to sell 18 supermarket stores to LXi REIT Plc. Shares of the latter fell around 2 percent.

Consumer goods giant Unilever advanced 1.2 percent on news its CEO Alan Jope will retire at the end of next year.

Valneva SE shares jumped nearly 3 percent. The French vaccine maker focused on infectious diseases said it is in active discussions with a prospective partner for potentially funding the development of a potential second-generation COVID-19 vaccine.

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