(Bloomberg) -- UBS Group AG Chairman Axel Weber said investors shouldn’t expect the relief rally sweeping European trading floors after elections in the Netherlands to endure, with political risk plaguing the continent this year.
“What we’ve seen in the Dutch election is that the center has been holding,” Weber said. “That leads to a short relief rally in the market. It’s not going to last” because the next election in France is already around the corner, he said in an interview with Bloomberg Television on Thursday.
European stock markets jumped Thursday after Dutch Prime Minister Mark Rutte’s Liberals easily beat off an election challenge by the anti-Islam Freedom Party of Geert Wilders. The outcome was worse than opinion polls had suggested for Wilders, representing a rejection of his platform of pulling the Netherlands out of the European Union, abandoning the euro, closing Dutch borders and stopping all immigration by Muslims.
It suggests that the nationalist sentiment that prompted the U.K.’s Brexit vote and won Donald Trump the White House will struggle to secure as big a foothold in Europe’s core. The region still faces key elections in France in April and May, then in Germany in September.
“The top risk we face is going to be political risk,” and it has “migrated from being an emerging markets phenomenon” to a developed markets phenomenon, Weber said. “Europe is going to be plagued by political uncertainty the entire year.”
--With assistance from Matthew Miller
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