LONDON: European shares rose in early deals on Friday as investors sought safety in defensive stocks after a shock UK election looked set to throw Britain into fresh political turmoil.
The pan-European STOXX 600 index was up 0.3%, while a drop in sterling to a seven-month low helped Britain’s internationally-facing FTSE 100 index gain 1%.
UK Prime Minister Theresa May’s Conservative party lost its majority in the House Commons just 10 days before Brexit talks were due to start, with the prospect of a hung parliament sparking fresh concerns around Britain’s exit from the European Union.
Defensive sectors - those less dependent on the economic cycle - such as food and beverages and health care rose 0.8% and 0.5% respectively, while British utilities such as Centrica were among top gainers.
Likewise safe-haven precious miners were also in demand, with Fresnillo up 3.2%, while overseas-earners such as Burberry and Diageo also rose.
Italian banks UBI Banca and Banco BPM jumped 6.5% and 2.5 respectively, leading a rise among European lenders.
Stocks linked to the British housebuilding industry were the biggest STOXX fallers, however, with builders merchant Travis Perkins dropping nearly 4%, Howden Joinery dropped 3.7% and commercial REIT Great Portland Estates fell 3.4%. - Reuters
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