Berliner Boersenzeitung - Frankfurt stocks rise on German vote outcome

Elsewhere equities mostly slid with investors still concerned about the inflationary effect of US Donald Trump's plans to slap tariffs on various trading partners and their impact on interest rates and economic growth.

Frankfurt's DAX index jumped 0.8 percent at the start of trading but gave up part of its gains as the day wore on, closing 0.6 percent higher.

Merz urged a speedy formation of a new coalition government, warning that Trump was driving rapid and disruptive changes and that "the world isn't waiting for us".

"The hope that the conservatives' win might help pull Germany out of economic stupor and help bolster collective defence has lifted investor spirits," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

European defence stocks gained, with Germany's Rheinmetall up more than six percent and Britain's BAE Systems up nearly four percent.

With more than 28 percent of the vote, Merz's CDU/CSU bloc handily defeated Chancellor Olaf Scholz's Social Democrats (SPD) and the Greens, as the anti-immigration Alternative for Germany celebrated a record of over 20 percent.

Merz said he would reach out to the Social Democrats with hopes of forging a stable ruling alliance of the two traditional big-tent parties.

"Investors welcomed the outcome of Germany's election, which saw centrist parties positioned to form a coalition," said City Index and FOREX.com analyst Fawad Razaqzada.

But CMC Markets analyst Konstantin Oldenburger said the failure of the DAX to hold onto its gains "can likely be attributed to the understanding that the crucial negotiations between the (conservatives) and the SPD are yet to come".

The euro rose against the dollar and the pound.

Elsewhere Monday, shares in Amsterdam-listed Just Eat Takeaway soared almost 54 percent after it received a 4.1-billion-euro ($4.3-billion) takeover offer from investment giant Prosus.

Asian equity markets mostly fell following a dour end to last week for Wall Street fuelled by disappointing economic data, with a report on Friday showing that activity in the US key services sector hit a 25-month low in February and that consumer sentiment dived almost 10 percent from January.

The readings followed a recent run of figures pointing to a softening of the labour market and prices continuing to rise faster than the Federal Reserve's target rate.

This week sees the release of the January PCE price index, the Fed's preferred inflation gauge, which could further lower investor expectations about interest cuts this year.

Wall Street opened higher, but then gave up its gains only to see the Dow and S&P rebound in late morning trading.

Oil prices posted modest gains after dropping as much as three percent on Friday as the weak US data sparked demand fears, while there are also growing expectations that Trump will ease sanctions that have limited Russian oil exports.

- Key figures around 1630 GMT -

New York - Dow: UP 0.4 percent at 43,593.12 points

New York - S&P 500: UP less than 0.1 percent at 6,016.63

New York - Nasdaq: DOWN 0.4 percent at 19,439.84

Frankfurt - DAX: UP 0.6 percent at 22,425.93 (close)

Paris - CAC 40: DOWN 0.8 percent at 8,090.99 (close)

London - FTSE 100: FLAT at 8,658.98 (close)

Hong Kong - Hang Seng Index: DOWN 0.6 percent at 23,341.61 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,373.03 (close)

Tokyo - Nikkei 225: Closed for a holiday

Euro/dollar: UP at $1.0472 from $1.0462 on Friday

Pound/dollar: UP at $1.2636 from $1.2628

Dollar/yen: UP at 149.65 from 149.32 yen

Euro/pound: UP at 82.88 pence from 82.81 pence

Brent North Sea Crude: UP 0.4 percent at $74.33 per barrel

West Texas Intermediate: UP 0.5 percent at $70.73 per barrel

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(A.Lehmann--BBZ)