European shares rose slightly on Wednesday, bouncing back from their biggest drop in almost a month, as investors took advantage of lower prices while staying cautious about political risks in France.
The pan-European STOXX 600 index rose 0.4% by early Wednesday.
France’s CAC 40 also gained 0.4%, recovering from a three-week low caused by fears that Prime Minister Francois Bayrou’s government might collapse next month. Mid-sized French stocks stayed mostly flat, while major banks BNP Paribas and Societe Generale extended small losses for a third day.
Three opposition parties announced plans to challenge Bayrou’s budget cuts on September 8. If the government falls, President Macron could appoint a new prime minister, keep Bayrou as a temporary leader, or call for early elections.
Stock markets in Germany, Italy, and Spain rose slightly, gaining between 0.1% and 0.3%.
Shares of Orsted and Novo Nordisk, which had been underperforming, rose 3.5% and 2%, respectively. Porsche climbed 3.8% after reports that the company is searching for a new CEO as Oliver Blume focuses on leading Volkswagen.
Rio Tinto’s London-listed shares rose nearly 1% after the company announced plans to simplify its operations into three units: Iron Ore, Aluminium & Lithium, and Copper.
Meanwhile, a survey showed German consumer confidence is expected to drop for the third month in September, as worries about job security and inflation weigh on households.
On the FX front, The euro fell 0.4% to $1.1593, and the British pound dropped 0.3% to $1.3441, losing some of the gains made after Trump announced plans to fire Fed Governor Lisa Cook over alleged issues with mortgage loans.
The U.S. dollar gained 0.2% against both the Japanese yen and the Swiss franc, while the New Zealand dollar dropped 0.4% to $0.5834.
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