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* German stock at 10-day highs
* Oil & gas, banks indexes outperforms
* IWG tops gains in spin-off report
Sept 27 (Reuters) - Europe's STOXX 600 index ended lower on
Monday as declines in tech stocks offset gains in banks and
energy, while German shares hit 10-day highs as the federal
election outcome reduced the chances of a left-wing coalition
forming a government.
Germany's blue-chip DAX rose 0.3%, leading gains
among regional indexes, while the pan-European STOXX 600 index
Germany's center-left Social Democrats were set to start
trying to form a government after they narrowly won their first
national election since 2005, saying they would seek to form a
coalition with the Greens and the liberal Free Democrats by
Christmas to take over from Angela Merkel's conservatives.
Investors were relieved that hard-left Linke party fell
below the 5% threshold needed to enter parliament.
"The left wing Die Linke party's poor election showing
appears to have ruled out a left wing alliance, and its likely
negative impact on German stocks," according to BlackRock
"We see the election outcome eventually resulting in a
moderate left or right leaning government."
German real estate company Vonovia, aircraft
engine maker MTU Aero Engines and renewables company
Siemens Energy were the top gainers on the DAX.
The oil & gas index climbed 2.8% to hit a
three-month high, while banks added 2.8%.
Oil majors TotalEnergies, Royal Dutch Shell
and BP rose between 3.4% and 4.8%, providing the
biggest boost to the STOXX 600.
"Concerns over the possibility that tech stocks have been
pumped up by easy money brings a potential shift towards
pro-cyclical laggard which often rise as yields improve," said
from Joshua Mahony, senior market analyst at IG.
While worries about hawkish central bank policies, fallout
from China Evergrande's financial troubles and inflation have
weighed on sentiment, investors are hoping that vaccination will
drive a steady global recovery.
The STOXX 600 index has climbed 15.9% so far this year,
falling slightly short of 18.3% rise in Wall Street's S&P 500
IWG Plc jumped 4.4% to the top of STOXX 600 after
Sky News reported that British office rental firm is exploring a
multi-billion pound break-up that would involve splitting it
into several companies.
Zooplus AG gained 4.3% after Swedish private
equity firm EQT AB made an offer to buy the online
pet supplies' retailer for about 3.36 billion euros ($3.94
billion), trumping a 3.29-billion-euro bid from U.S. private
equity Hellman & Friedman.
Spain's Cellnex Telecom slid 4.1% after Citigroup
downgraded the stock to "sell," citing valuation concerns.
(Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru;
Editing by Arun Koyyur and Angus MacSwan)