European Stocks Close Higher As Investors Digest Earnings, Await Central Bank Meetings

European stocks closed higher on Monday, with investors reacting positively to a slew of upbeat earnings updates and looking ahead to central bank meetings due this week.

Concerns about the conflict in the Middle East continued to weigh on sentiment and limited markets‘ upside.

The Federal Reserve, Bank of Japan and Bank of England all are set to announce their monetary policy decisions this week.

The pan European Stoxx 600 climbed 0.36%. The U.K.’s FTSE 100 ended higher by 0.5%, Germany’s DAX advanced 0.2% and France’s CAC 40 gained 0.44%, while Switzerland’s SMI surged 0.57%.

Among other markets in Europe, Austria, Belgium, Denmark, Finland, Greece, Iceland, Norway, Poland, Spain and Sweden ended higher.

Portugal, Russia and Turkiye edged up marginally, while Netherlands closed flat.

St. James’s Place, Pearson, ITV, EasyJet, TUI, Ds Smith, M&G, Smiths, Prudential, Standard Chartered, Auto Trader Group and Imperial Brands gained 2 to 3%.

BT and British American Tobacco both gained nearly 2%. Reckitt Benckiser surged higher after launching the first tranche of its share buyback program.

Diageo, Associated British Foods, Persimmon, CRH, BAE Systems, Just Eat Takeaway.com, IAG and Lloyds Banking Group also moved up sharply.

Ascential soared 26% in London after the information and analytics firm said it would sell its digital commerce and consumer research units for a combined enterprise value of 1.4 billion pounds ($1.70 billion).

HSBC Holdings declined 2.6%. Natwest Group, BP, 3i and Carnival lost 1 to 2%. Royal Dutch Shell ended modestly lower.

In the German market, Siemens Energy soared nearly 13%. Supervisory Board Chairman Joe Kaeser said in an interview with newspaper Welt am Sonntag that talks with the German government are about state guarantees, not a direct cash injection.

HeidelbergCement, MTU Aero Engines, Porsche, Vonovia, Siemens, Allianz, Beiersdorf, Munich RE and RWE gained 1 to 1.6%.

Infineon tumbled more than 6%. Sartorius ended lower by about 5%. Merck and Qiagen, both lost around 3.6%. Mercedes-Benz ended 1.1% down.

In Paris, Teleperformance rallied 3.5%. Sanofi surged 3.4%. Dassault Systemes and Alstom gained 2.7% and 2.5%, respectively.

AXA, LVMH, Carrefour, Pernod Ricard, Vinci, Safran and Michelin gained 0.9 to 1.6%.

STMicroElectronics drifted down 5.7%. ArcelorMittal ended nearly 4% down. At least 32 people were killed Saturday when a fire broke out at a mine in Kazakhstan belonging to the global steel giant.

Stellantis, BNP Paribas and WorldLine declined 2.1%, 1.7% and 1.3%, respectively.

On the economic front, Eurozone economic sentiment dropped marginally to a near three-year low in October, largely reflecting deteriorating confidence in industry and retail trade, survey data from the European Commission showed.

The economic confidence index fell marginally to 93.3 in October from 93.4 in the previous month. This was the lowest reading since November 2020 but above economists’ forecast of 93.

Preliminary estimates from Destatis showed Germany’s GDP fell 0.1% sequentially in the third quarter, offsetting an upwardly revised 0.1% rise a quarter ago. The pace of contraction was slower than the expected 0.3 percent decline.

Consumer price inflation in Germany eased faster than expected in October to reach its lowest level in over two years, thanks to falling energy prices, preliminary data from the statistical office Destatis showed.

The consumer price index, or CPI, rose 3.8% year-on-year, following a 4.5% increase in the previous month. Economists had forecast 4% inflation. The latest CPI inflation rate was the lowest since August 2021, when it was at the same level, Destatis said.

Core inflation, which excludes prices of food and energy slowed to 4.3% from 4.6% in the previous month.

The UK mortgage approvals declined to an eight-month low in September as rising interest rates damped housing market activity, data from the Bank of England showed. Furthermore, data on credit to businesses and consumers suggested that the economy is heading into a mild recession. Net mortgage approvals for house purchases fell to 43,300 in September from 45,400 in August.

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