European Stocks Today: Stoxx 600 Edges Up on M&A Optimism Despite France Turmoil

European stocks inched higher as M&A optimism outweighed the political fallout from France’s no-confidence vote. The Stoxx 600 opened firmer, led by basic-resources names after a landmark mining merger put copper front and center for equity investors hungry for long-duration growth stories. Even in Paris, the CAC 40 traded modestly higher, suggesting that markets are treating the government reshuffle as noise unless and until it spills into sovereign spreads or fiscal plans.
Dealmaking set the tone. A proposed mega-merger between Anglo American and Teck Resources—a transatlantic combination with a heavy copper tilt—sparked a bid for miners and revived the broader “animal spirits” narrative across Europe. Investors like what this implies about boardroom confidence: if CEOs are committing to scale and synergy now, they likely see manageable funding conditions and resilient end-demand. The pop in Teck’s Frankfurt-listed shares reinforced that view, while London’s response showed that the region’s equity capital markets can still reward transformational moves.
France’s politics remained a variable, but not a veto. With a new prime minister to be named, markets are watching for a credible deficit path and a cabinet able to pass a 2026 budget without resorting to one-off fixes. For equities, the transmission channel is the OAT-Bund spread; as long as that gauge stays contained, stock investors will focus on earnings, rates, and corporate actions. Banks were mixed on Tuesday—a reflection of stable spreads and a “wait-for-the-ECB” stance—while defensives lagged on the mild risk-on tone.
Macro currents were quietly supportive. Global yields hovered near recent lows, a tailwind for equity valuations and higher-beta sectors. The dollar’s steadiness limited currency boosts for exporters but also kept cross-asset noise subdued. Meanwhile, gold near records telegraphed lingering macro caution without derailing the equity bid—another sign that investors are balancing hedges with risk exposure rather than choosing one or the other.
What to watch next: sustained deal flow (especially in resources and industrials), the ECB decision and guidance later this week, and any widening in French spreads that could ripple into bank funding costs. For portfolio construction, that argues for a barbell—own quality cyclicals with copper and capex leverage on one end, and cash-flow compounders on the other—while keeping optionality for follow-on M&A.