France’s leftwing coalition came first in the second round of its parliamentary election in a shock result that keeps the far-right out of power. Investors are bracing for uncertainty as they wait to see whether the left can work with Emmanuel Macron’s centrist Together alliance. France’s benchmark stock index, the Cac 40, dropped by 0.5% in the opening trades on Monday morning. The euro dipped as currency markets opened on Sunday evening, dropping as low as $1.08 against the US dollar. However, it recovered most of its losses on Monday morning as investors weighted up the prospect of a period of political gridlock as the leftwing New Popular Front tries to work with Together. France’s Cac 40 stock market index was due to drop by 0.6% when stock markets open on Monday morning. Holger Schmieding, an economist at Berenberg, an investment bank, said the election would spell the end for Macron’s investor-friendly reforms. He said: "The political forces that joined forces to prevent an RN government have little else in common. Their views on migration, social and cultural issues, fiscal policy and the need for pro-growth reforms are often diametrically opposed. Forming a government will not be easy. Times are tough, emotions are running high – and France has no tradition of forging coalitions between parties of very different political persuasions." On UK stock markets, FTSE 250 drinks maker Britvic has agreed to a takeover by Danish brewer Carlsberg after a sweetened deal valued the Fruit Shoot maker at £3.3bn. Britvic shareholders will be entitled to receive £13.15 per share, versus a close of £12.10 on Friday and 36% above the £9.70 price on 19 June, when news of the takeover got out. The company, which also makes the J2O juice drink and Robinson’s squash, had initially rejected a £3.1bn offer on 21 June. Britvic’s directors will unanimously vote in favour of the acquisition, the company said on Monday morning in a statement to the stock market. It will be only the latest in a series of foreign takeovers of prominent British companies. Carlsberg’s executives and bankers have been busy: they have also bought out the share of UK company Marston’s in a brewery joint venture. More details of that deal to come. We’ll be tracking all the main events throughout the day ...
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