European Stocks Close Broadly Higher After Cautious Session

European stocks closed a bit higher on Monday, edging up slightly after turning in a somewhat weak performance in the previous session.

Expectations that the stimulus measures announced by China last week will help revive the property sector in the world’s second largest economy, and optimism about interest rate cuts in the coming months helped underpin sentiment in European markets.

European sovereign bond yields edged up after ECB Governing Council member Martins Kazaks indicated in a Bloomberg Adria interview that June seems the right moment to start lowering borrowing costs, but future moves will be largely determined by incoming data.

Kazaks emphasized that any reduction in rates should be “cautious” and “gradual,” and that the process should not be rushed.

Separately, ECB executive board member Isabel Schnabel also warned against back-to-back interest-rate cuts in June and July.

“Based on current data, a rate cut in July does not seem warranted as there is a risk of easing prematurely,” she told the Nikkei newspaper.

Bank of England’s Deputy Governor Ben Broadbent said the interest rate could be cut some time over the summer.

The outgoing deputy governor said if things continue to evolve as expected, then the policy will have to become less restrictive at some time.

Elsewhere, U.S. Fed Governor Michelle Bowman said on Friday that she has seen no progress in inflation this year and remains willing to hike rates should progress stall or reverse.

The pan European Stoxx 600 ended higher by 0.8%. The U.K.’s FTSE 100 edged up 0.05%, Germany’s DAX and France’s CAC 40 both ended up by 0.35%, while Switzerland’s SMI climbed 0.76%, extending gains to a third straight session.

Among other markets in Europe, Austria, Belgium, Finland, Greece, Netherlands, Poland, Portugal, Spain, Sweden and Turkiye closed higher, while Russie ended weak.

In the UK market, Rolls-Royce Holdings rallied nearly 4.5%. Fresnillo, Weir Group, Entain and Airtel Africa gained 2.4 to 4%.

Ashtead Group, JD Sports Fashion, Melrose Industries, RightMove, ICG, Kingfisher, IMI, Lloyds Banking Group, Antofagasta, Centrica, Smiths Group, Admiral Group and IHG ended higher by 1 to 2%.

Shares of Keywords Studios soared about 61% after the company said that it is in talks with European private equity company EQT Group over a possible cash offer worth 2,550 pence a share.

EasyJet, Burberry Group, Ocado Group, Sage Group, Prudential, Beazley, BT Group, Frasers Group, Imperial Brands, Natwest Group and Reckitt Benckiser lost 1 to 3.2%.

In the German market, Covestro gained more than 2%. MTU Aero Engines, SAP, Infineon, Deutsche Telekom, Commerzbank, BASF and Henkel also posted notable gains.

Siemens Energy drifted down more than 2.5%. Porsche, Puma, Mercdes-Benz, BMW and Volkswagen lost 1 to 2%.

In the French market, Teleperformance climbed about 3%. Societe Generale, Safran, Airbus Group, Schneider Electric, Thales and Kering gained 1 to 2.3%.

Carrefour, STMicroElectronics, Engie, Renault and Pernod Ricard closed weak.

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