European shares in calm waters

Early Monday trading saw no significant moves in European shares as German Chancellor Angela Merkel's landslide victory in a general election on Sunday had already been penciled in by investors.

The FTSEurofirst 300 index of top European stocks was marginally down at around 1,260 points, while both Germany's blue-chip DAX and France's CAC 40 did not move far away from where they left off on Friday evening.

Global Equities economist David Thebault told Reuters news agency Merkel's election victory was largely seen as a sign of political and economic stability.

Good-bye to austerity?

"Markets love stability," he commented. "It's one less risk to worry about, and Merkel's really good score will also give her room for maneuver and hopefully we'll see the focus in Europe shifting from austerity to stimulus," Thebault said.

He argued that the continent was just getting out of the debt crisis and concluded that what was needed most now were measures to boost consumer spending.

German business leaders also appeared confident that the domestic economy would pick up further after the election results, although some warned a possible grand coalition of Christian and Social Democrats could put on hold vital labor market reforms.

hg/dr (Reuters, dpa)