European Shares Resilient Amid Merger News and Political Uncertainty

European shares closed barely changed on Tuesday as Anglo American's merger deal with Teck Resources and rising oil prices offset political uncertainties in France. Stocks reacted positively to corporate mergers, while concerns grew over France's political crisis, impacting investor sentiment and potential credit rating downgrades.

European shares closed stable on Tuesday, buoyed by Anglo American's merger with Teck Resources and rising oil prices, despite political turmoil in France. The pan-European STOXX 600 recorded a marginal gain, spearheaded by the basic resources index, amid market apprehension over France's political situation post-Prime Minister Bayrou's ouster.

Anglo American shares soared following the merger announcement, prompting an outlook revision from S&P to positive. Meanwhile, France's CAC 40 index edged up as market nervousness lingered with President Macron's government facing a major political crisis. The bond market reflected this unease with growing yield differentials.

The potential downgrade of France's credit rating adds to the economic uncertainty. Oil and gas sectors posted gains, reflecting geopolitical tensions, while European investors focus on upcoming ECB monetary policy decisions and U.S. inflation data. Merger activity continues with Novartis eyeing Tourmaline Bio, affecting various indices regionally.

(With inputs from agencies.)