European stock indices ended Monday’s session little changed, as investors weighed how corporates will cope with higher interest rates, while rising concerns over widening fiscal deficits and political uncertainty pushed sovereign yields higher. The Euro STOXX 50 edged up 0.1% to 6,399, and the STOXX Europe 600 finished flat at 649.8.
In Germany, the far-right AfD party secured victory in state elections in Saxony-Anhalt over the weekend—its first major win—adding to the trend of growing political fragmentation across Europe. Bund yields jumped amid expectations of larger budget deficits and mounting inflation risks driven by surging natural gas prices, as the European Central Bank prepares to deliver its second interest rate increase of the year later this week.
Insurance stocks came under pressure, with Munich Re dropping 3% and Allianz slipping nearly 1%. By contrast, semiconductor names outperformed: ASML advanced 2.3%, while Infineon rallied 6.4%, supported by strong guidance and signals from South Korean chipmakers that buoyed the sector.
