The STOXX 600 index advanced 0.6%, bouncing back from last week’s selloff sparked by geopolitical fears as well as concerns that the Fed will delay interest rate cuts
European stocks ended higher on Monday, with British blue-chips nearing record levels as investors took comfort from easing tensions in the Middle East and looked ahead to earnings from European banks and U.S. tech giants later this week.
The STOXX 600 index advanced 0.6%, bouncing back from last week’s selloff sparked by geopolitical fears as well as concerns that the Fed will delay interest rate cuts.
The main European regional markets excluding Italy gained on Monday, with Britain’s FTSE 100 climbing 1.6% to near record highs, supported by a weaker pound and rising metal prices.
Traders also unwound their defensive positioning after Iran said that it had no plan to retaliate after a reported Israeli attack within its borders.
It is a bit of a messy picture for markets at the moment with huge uncertainty around events in the Middle East, US tech seeing its biggest sell-off for nearly 18 months, and with yields jumping as rate cuts gets increasingly pushed out, according to Deutsche Bank strategist Jim Reid.
Earnings reports from European lenders will be in the spotlight this week as investors are likely to get a clearer picture of whether elevated interest rates are still boosting profits or if a year-long share price rally will run out of steam.
Overall, quarterly earnings for STOXX 600 firms are expected to drop 12.1% from a year ago, per LSEG data.
Bigger focus will be on earnings from some of Wall Street’s biggest names including Alphabet, Microsoft and Meta Platforms as well as economic data from across the world later this week.
French central bank chief Francois Villeroy de Galhau said on Sunday tension in the Middle East is unlikely to drive up energy prices and should not impact the ECB’s plans to start reducing interest rates in June.
Greece’s ATHEX index advanced 2.0% after credit ratings agency S&P revised the country’s outlook to “positive” from “stable”.
