Europe’s STOXX 600 regains some ground after last week’s battering

PARIS: European shares closed up on Monday, recouping some of the steep losses clocked last week with technology and financials leading gains, while Ryanair led a rout amongst airlines after reporting a quarterly profit slump.

The pan-European STOXX 600 index closed 0.9% higher, coming off a five-day losing run, a streak last seen in October 2023.

Most sectoral indexes closed higher, with technology shares adding 1.8%, coming off their worst weekly drop in over three years, as some chip stocks rebounded following the global selloff seen last week when investors fretted over the prospects of possible US trade restrictions.

China-exposed luxury firms such as LVMH, Kering and Hugo Boss advanced between 1.2% and 4.3% after Beijing surprised markets by cutting major short and long-term interest rates, its first such broad move since August last year, signalling intent to boost growth in the world’s second-largest economy.

Political uncertainties in the United States, coupled with the chip selloff had dragged the benchmark index to log its biggest weekly decline of 2024 last week. Lack of policy direction from the European Central Bank also added to investor concerns.

ECB policymaker Peter Kazimir opened the door to two more interest rate cuts by the end of the year, if data justified them.

Bucking the trend, Ryanair tanked 17.2% to the bottom of the STOXX 600 index after the airline’s profits slumped by almost half in the three months to the end of June as ticket prices plunged 15% from the same period last year.

“Ryanair has informed markets that greater ‘price stimulation’ will be needed this summer – in plain language it’s pushed passengers past their limit and needs to roll back on the further price hikes it had anticipated making,” AJ Bell’s head of financial analysis, Danni Hewson, said.

Ryanair dragged the travel and leisure sub-index down 2.4%, amongst the outliers across major STOXX sectors.

Meanwhile, investors assessed the impact of US President Joe Biden abandoning his reelection bid on Sunday, and then endorsing Vice President Kamala Harris as his party’s candidate.

Later in the week, some of the region’s largest lenders including Spain’s Santander, France’s BNP Paribas , Germany’s Deutsche Bank and Italy’s UniCredit are all slated to report their quarterly numbers throughout this week.

Euro zone banks index advanced 2% at the start of the week.

Among other stocks, Rentokil Initial gained 7.8% after The Sunday Times reported that former BT chief Philip Jansen is in talks to buy the British pest-control firm.