European stocks rise as Germany nears coalition government; TSMC impresses

European stock markets rose Monday, starting the new week on a positive note as Germany moved nearer to the formation of a coalition government.

At 03:05 ET (08:05 GMT), the DAX index in Germany climbed 0.7%, the CAC 40 in France gained 0.6% and the FTSE 100 in the UK rose 0.1%.

Sentiment boosted by likely German stimulus 

German election winner Friedrich Merz’s conservatives and the Social Democrats concluded preliminary talks on forming a coalition government on Saturday.

The two parties were racing for a deal before next week when they hope to push a loosening of Germany’s borrowing limits through parliament to revive growth in Europe’s largest economy.

The idea of additional stimulus in Germany has boosted sentiment throughout the region, particularly given the macro-economic worries President Donald Trump’s trade policies are causing on Wall Street.

JPMorgan has lifted its forecast for the euro area’s economic growth for 2025 on the back of Germany’s fiscal loosening reforms – now expecting 0.8% growth, up from its previous forecast of 0.7%, and 1.2% growth in 2026, up from 0.9%.

“This revision is primarily driven by Germany, but we also anticipate slightly stronger growth across the rest of the region from spillovers and slightly looser fiscal policy,” said JPM economists in a note dated March 7.

There was some positive economic news Monday, after data showed that German industrial output rose in January by 2.0% compared with the previous month, beating expectations for a 1.5% rise.