European Stocks Rise, France Slips as Polls Narrow in Favor of Le Pen

European stock markets were mixed Monday as investors reacted to the continued ebb and flow of merger news and politics returned to the fore with French election polls narrowing in favor of Marine Le Pen.

Le Pen, the most divisive candidate standing in the Presidential election, saw polls for voting intentions in the second and final round of the race narrow.

The news pushed French ten-year yields sharply higher and sent unease rippling across Gallic financial markets, with investors on edge given her electoral pledges to abandon the euro and to redenominate France's national debt in a new French franc.

Accordingly, the CAC 40 index slipped sharply, although it pared losses throughout the afternoon to close -0.05% lower at 4,864. The French ten year yield rose by nearly 10 basis points at noon, to top 1.12%, before paring the ascent.

The FTSE 100 was little changed in London, breaking even for the session at 7,299, while the DAX gained 0.69% in Frankfurt as German stocks were buoyant across the board.

The Stoxx Europe 600 index, the broadest measure of European stocks, rose by 0.22% 371.0.

Friday's biggest riser in Europe, Unilever (UL) , was one of the big fallers in Europe on Monday and formed the primary weight on the London market. This was after Kraft Heinz (HNZ) said at the weekend that it will not be pursuing a $140 billion tie up with the consumer food and healthcare products giant.

The stock fell by 7% before the close, erasing only around half of Friday's gain, which might suggest that some investors are still holding out for a further bid from Kraft or perhaps an offer from another rival.

Offsetting some of the losses in London, RBS (RBS) stock rose by more than 7% after it said it will abandon plans to sell off part of its retail bank, Williams & Glyn, which it had been ordered to do by the European Commission.

The lender is now considering alternative ways of repaying taxpayer aid granted to it during the financial crisis. It will take a $920 million charge in the fourth quarter over the change but will re-consolidate the 341 retail branches into its group results.

This is while Deutsche Telekom (DTEGY) topped the DAX on speculation that Softbank (SFTBF) could be contemplating a merger between its Sprint asset and DT's T-Mobile, the third and fourth largest wireless carriers in America.

The pair have considered a merger before, which was opposed by regulators, although the last time around a deal will have seen Softbank as the majority owner in the combined entity.

This time around, Deutsche Telecom will own the majority share of the combined entity after T-Mobile took third place among U.S wireless carriers in 2015.

In France, cement maker Holcim (HCMLY) and oil and gas engineer, Technip (TKPPY) topped the list of risers, while L'Oreal (LRLCY) , Credit Agricole (CRARY) , Societe Generale (SCGLY) were the biggest fallers on the CAC 40.