Pallade Veneta - Europe stocks rise with French vote on horizon

"European markets are in recovery mode, with widespread gains taking shape," said Shore Markets analyst Joshua Mahony.

"Despite ongoing concerns around this weekend's French parliamentary election, French stocks are on the rise as investors buy the dip that saw the CAC lose almost 10 percent in a month," he said, referring to the Paris benchmark stock index CAC 40.

President Emmanuel Macron threw markets into turmoil by calling the snap election after his centrist party was trounced by the far-right National Rally (RN) in an EU vote two weeks ago.

Opinion polls showed the RN garnering 35-36 percent of voting intentions for Sunday's first round, ahead of a left-wing alliance on 27-29.5 percent and Macron's centrists in third on 19.5-22 percent. The second round will be held on July 7.

"The positive tone being taken by European markets could yet come into question as we get closer to this potential seismic shift in French politics," cautioned Mahony.

Investors meanwhile set aside a key survey showing that German business sentiment unexpectedly fell in June, pouring cold water on hopes Europe's biggest economy is on course for a strong rebound.

The Ifo institute's confidence barometer, based on a survey of around 9,000 companies, declined to 88.6 points from 89.3 in May. It was lower than a forecast of 89.8 points from analysts surveyed by financial data firm FactSet.

"Today's results add to the growing stream of indicators sending mixed signals on where the eurozone's biggest economy is heading," said Oxford Economics analyst Mateusz Urban.

"Overall, we think that the German economy will struggle to grow in the near-term."

Elsewhere, Asian equities were mixed Monday after last week's poor run as investors look ahead to the release of key US inflation data, while eyes are also on Japan as the yen sits around three-decade lows.

A forecast-topping read on the US services sector provided further evidence that the world's top economy remained in good health and dealt a blow to hopes for interest rate cuts.

A surge in the tech sector has helped push markets to record or multi-year highs, but concerns that the buying has gone too far have set in and profit-taking has weighed on equities in recent weeks.

Wall Street ended broadly lower Friday, with the better-than-expected read on the US services sector, which is at a more than two-year high, weighing on sentiment.

The next major indicator will come at the end of this week with the personal consumption expenditures (PCE) index -- the Federal Reserve's preferred gauge of inflation -- which could play a key role in the bank's plans for monetary policy.

Investors are also tracking developments in Japan as the yen struggles against the dollar, leading the country's top currency official to warn that authorities were ready to step in to provide support.

- Key figures around 1110 GMT -

London - FTSE 100: UP 0.5 percent at 8,279.40 points

Paris - CAC 40: UP 0.9 percent at 7,693.51

Frankfurt - DAX: UP 0.6 percent at 18,276.23

EURO STOXX 50: UP 0.8 percent at 4,948.02

Tokyo - Nikkei 225: UP 0.5 percent at 38,804.65 (close)

Hong Kong - Hang Seng Index: FLAT at 18,027.71 (close)

Shanghai - Composite: DOWN 1.2 percent at 2,963.10 (close)

New York - Dow: UP 0.1 percent at 39,150.33 (close)

Dollar/yen: DOWN at 159.48 yen from 159.61 yen on Friday

Euro/dollar: UP at $1.0728 from $1.0697

Euro/pound: UP at 84.76 pence from 84.53 pence

Pound/dollar: UP at $1.2660 from $1.2651

West Texas Intermediate: UP 0.2 percent at $80.92 per barrel

Brent North Sea Crude: UP 0.3 percent at $85.48 per barrel

burs-rfj/lth

D.Bruno--PV