Europe close: Markets rise on Japan election cheer
By Josh White
Date: Monday 09 Feb 2026
(Sharecast News) - European equity markets closed higher on Monday, tracking strong gains in Asia after Japan's prime minister Sanae Takaichi and her ruling Liberal Democratic Party secured a decisive victory in Sunday's national election.
The pan-European Stoxx 600 rose 0.7% to 621.41, with Germany's DAX climbing 1.19% to 25,014.87 and France's CAC 40 adding 0.6% to 8,323.28.
The UK's FTSE 100 lagged its continental peers but still edged 0.16% higher to 10,386.23.
Russ Mould, investment director at AJ Bell, said that "a calm start to the week on financial markets is a major relief given recent tech sector jitters," adding that "all the major European indices moved higher, with the FTSE 100 led by mining stocks."
Sentiment was buoyed by a sharp rally in Japanese markets, where shares hit record highs and the yen strengthened against the dollar.
"Takaichi's spend big and tax low approach has gone down well with stock markets, with the Nikkei crossing the 57,000 barrier for the first time before pulling back a little," said Derren Nathan, analyst at Hargreaves Lansdown.
He warned that the policy stance would put pressure on productivity and growth to balance public finances, adding that with Japanese inflation close to the Bank of Japan's 2% target, there were risks that excessive stimulus could reignite price pressures.
Nathan said the relationship between governor Kazuo Ueda and the newly-strengthened prime minister would be a key focus for markets.
Mould said Japanese shares had rallied sharply after Takaichi's landslide win, noting that "investors are excited at the prospect of economic stimulus measures and the prime minister's desire to drive corporate investment in the tech space."
He added that Japan's Nikkei 225 had risen 68% since April last year, calling it "an unusually large movement for an equity index in such a short period," driven by a weaker yen and a shift in the political backdrop.
In London, the FTSE 100 dipped in early trading before recovering, amid political uncertainty surrounding prime minister Keir Starmer after the resignation of his director of communications and chief of staff.
The developments followed controversy over the appointment of Peter Mandelson as ambassador to the United States, with Mandelson now facing a police investigation into his links to Jeffrey Epstein.
Patrick Munnelly, market strategy partner at TickMill, said that "politics were front of mind for investors in the UK," noting that gilt yields and the pound "nudged slightly higher as markets digested ongoing speculation about the future of Keir Starmer as prime minister."
He added that "movement among government bonds and the currency suggests there is no panic on financial markets about the stability of the UK government," despite intensifying political pressure.
Eurozone investor confidence improves for third month in a row
Economic data in Europe added to the positive tone.
Investor confidence across the eurozone improved for a third consecutive month in February, according to Sentix, with its economic index rising to +4.2 from -1.8 in January, the highest level since July 2025.
The expectations component climbed to 15.8, also its strongest since July, while Sentix said the survey results suggested a regional recession had ended and highlighted growing optimism toward Germany among institutional investors.
In the UK, a report from KPMG and the Recruitment & Employment Confederation showed the hiring downturn easing slightly in January.
The decline in permanent placements slowed to its weakest pace in 18 months, temporary billings rose for the first time in three months, and wage growth accelerated, with starting salaries increasing at their fastest rate in nearly 18 months.
"After a difficult end to last year, it's encouraging to start this year with tentative signs that hiring appetites are beginning to improve," said KPMG UK's head of advisory Lisa Fernihough.
InPost surges on deal to be acquired, Greggs in the red
In equities, shares in InPost surged 13.53% after a consortium led by Advent and FedEx agreed a €7.8bn deal to acquire the parcel-locker operator for €15.60 a share.
Mould said FedEx had "packaged up its next steps in the quest for global domination of the parcel delivery sector," adding that by taking a 37% stake rather than buying the company outright, the group gains "decent exposure to any upside in InPost but also a way of spreading the risks if the deal doesn't quite go to plan."
He noted that while InPost had built a strong presence in the UK, it had faced headwinds from slowing parcel growth in Poland, competition, price pressures and a legal dispute with Allegro, and said Advent's return as a major backer suggested it "must see potential in reshaping the business through private ownership and out of the public spotlight."
Plus500 climbed 6.91% after forecasting results ahead of expectations, a move Munnelly said reflected improving confidence after the online trading platform "boosted investor optimism by forecasting stronger-than-expected results for 2026."
UniCredit rose 6.36% after reporting a record annual net profit of €10.6bn.
Novo Nordisk gained 5.25% as investors reacted to news that Hims would stop offering a GLP-1 pill following a warning from the US Food and Drug Administration.
On the downside, Premier Foods and Greggs were in the red, with Munnelly noting that Greggs had come under pressure after Jefferies warned that the growing popularity of weight-loss drugs could curb demand and weigh on sales growth.
Reporting by Josh White for Sharecast.com.
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