FRANKFURT: European shares ended higher on Monday in broad-based gains led by banks, kicking off a week packed with central bank decisions and delayed US economic data on a positive note, as investors returned to risk assets after last week’s subdued finish.
The pan-European STOXX 600 closed 0.82 percent higher at 582.97, putting it 0.6 percent away from a record high. Major regional bourses also advanced, with Spain’s ending at a record close - up 1.2 percent.
The STOXX 600 slipped into negative weekly territory at the last moment on Friday, mirroring Wall Street after US chipmaker Broadcom’s profit margin warning sparked renewed concerns about a potential bubble in artificial intelligence stocks.
The market staged a broader recovery on Monday, with 19 of the 20 main sectors trading higher, led by heavyweight banks , which rose 1.8 percent to close at a level last seen in May 2008.
Insurers rallied a 1.2 percent jump, and travel stocks climbed 1.3 percent, further boosting the main index.
XTB’s research director Kathleen Brooks said that risk sentiment was stabilizing after the sell-off as markets turned their attention to macroeconomic factors this week.
An index of automakers was the only outlier, down 0.14 percent, after two straight days of gains. The losses were limited by an expected reprieve for regional carmakers, with Brussels set to reverse the EU’s effective ban on sales of new combustion-engine cars from 2035. On the geopolitical front, Ukrainian President Volodymyr Zelenskiy resumed talks in Berlin with envoys of US President Donald Trump. As part of a deal to end the nearly four-year-old war, the US negotiators told Ukraine to withdraw its forces from the eastern Donetsk region.
Major defence firms slipped, with Rheinmetall and Hensoldt down 2.6 percent and 1.2 percent, respectively. On the flip side, Ukraine-exposed miner Ferrexpo jumped 7.1 percent.
The STOXX 600 has had a positive December so far, as optimism around US interest rate cuts and progress on a Russia-Ukraine ceasefire lifted sentiment.
“Markets are expecting earnings growth and looser monetary policy, so many investors think this is a supportive market environment for European indices,” said Roland Kaloyan, head of European equity strategy at Societe Generale.
On the macro front, the European Central Bank’s monetary policy decision is due on Thursday, with markets widely expecting it to keep rates on hold. Market sentiment shifted last week following unexpectedly hawkish comments from ECB policymaker Isabel Schnabel, who suggested a rate hike could be the next move, though it would not happen in the near term.
Comments
Comments are closed for this article.