Stocks advanced in Europe on Monday, with the benchmark index in Paris briefly rising 2.8% after the far-right National Rally party took a strong lead in the first round of legislative elections.
Other European markets opened higher, while most Asian markets also gained.
The euro rose to $1.0771 from $1.0744 as polling agencies suggested National demonstration could win a majority in the lower house of parliament. However, the result remains uncertain and the voting system is complex.
In Paris, the CAC 40 fell and was trading up 1.6% to 7,594.08 points, while the German DAX rose 0.5% to 18,320.36 points. In London, the FTSE 100 rose 0.5% to 8,203.40 points.
The euro's gains were likely due to relief that far-right parties did not get more votes than expected, economists at ING Economics said in a note.
"Still, the results of the first round do not offer much certainty about the composition of parliament, and the second round scheduled for next weekend is, in fact, the highest-risk event," they said.
In Asian trading, Japan's benchmark Nikkei 225 index added 0.1% to 39,631.06 after a quarterly survey The Bank of Japan's "tankan" report showed a modest improvement in sentiment among the country's largest manufacturers in April-June.
However, the government lowered its growth estimate for the first quarter of the year, to an annual rate of -2.9% from the previous figure of -1.8%.
"Across all industries and company sizes, business conditions remained stable at 12, which is consistent with (quarterly) GDP growth of around 0%," said Marcel Thieliant of Capital Economics in assessing the tankan. "A further slowdown in GDP growth this quarter would be consistent with the decline in industrial production that companies were forecasting for June."
The dollar rose further against the Japanese yen and was trading at 161.04 yen early Monday, compared with 160.80 yen on Friday.
The Shanghai Composite rose 0.9% to 2,994.73 after a survey of factory purchasing managers released over the weekend showed conditions remained in contraction for a second straight month.
But a similar private sector survey of manufacturing activity released Monday showed an improvement in business conditions. The Caixin Manufacturing PMI rose to 51.8 in June on a scale of up to 100, compared with 51.7 in the previous month. Readings above 50 are considered to show expansion.
Hong Kong markets were closed for a holiday.
Australia's S&P/ASX 200 lost 0.2% to 7,750.70. South Korea's Kospi rose 0.2% to 2,804.31 after a private sector survey showed South Korea's factory activity was the best since April 2022.
On Friday, a late-day selloff left the S&P 500 down 0.4% and in the red for the week. The Nasdaq Composite fell 0.7%, while the Dow Jones Industrial Average fell 0.1%.
Despite the downbeat ending, the S&P 500 and Nasdaq remain near their all-time highs.
The S&P 500 gained 3.5% in June and is up about 14.5% so far this year. The Nasdaq gained about 6% for the month and is up 18.1% this year.
A report showed Inflation continues to declineInvestors are hoping that cooling inflation will prompt the Federal Reserve to start cutting interest rates, which remain at their highest level in more than 20 years.
Consumer prices rose 2.6% in May compared to a year earlier, according to the latest personal consumption expenditure index, or PCE. That indicated a continued decline from a reading of 2.7% in April and is well below the peak reading of 7.1% two years ago.
The Federal Reserve has kept interest rates at their highest level in more than two decades in an effort to tame inflation and return it to its 2% target. Other measures of inflation, including the well-known consumer price index, have also shown that price pressures are easing.
In other trading, benchmark U.S. crude rose 45 cents to $81.99 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, added 43 cents to $85.43 a barrel.
