Electoral Risks Continue to Dictate Sentiment

European stocks opened lower Monday as investors eye political developments in the U.K., where the fragile government of Theresa May faces a crucial weeks of tests that could result in a second election later this fall, and test the market's resilience to a troubling pullback in tech stocks Friday in the U.S.

Britain's FTSE 100 slipped at the open with similar declines for most major indices around the region. Markets in France, however, will likely buck the trend as investors take confidence in a resounding win for President Emmanuel Macron's Republic on the Move party in the first round of the country's parliamentary elections.

In the U.K., May spent much of the weekend forming alliances both inside and outside of her Conservative party in an attempt to mitigate the damage from Thursday's general election, which erased her majority in parliament and threw her Brexit ambitions into chaos.

A so-called "supply and confidence" arrangement with lawmakers from Northern Ireland - which stops short of a full coalition - could buy May and her colleagues a few more weeks of stability, but the potential for an early collapse is real and the lack of a true mandate to negotiate an EU exit has changed the tenor of discussions that are set to begin next week.

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This article was written by a staff member of TheStreet.