European shares recovered on Monday as upbeat corporate updates helped investors look past elevated oil prices. The STOXX 600 closed 0.77% higher, while investor attention now turns to central bank decisions later this week.
The pan-European STOXX 600 closed 0.77% higher at 640.66 points, led by Computacenter and Genmab. Investors looked past elevated oil prices at the start of a week packed with policy decisions. European equities had been battered last week after tensions in France and higher oil prices.
Company news drives the gains
Computacenter closed over 13% higher, its steepest one-day gain since April, after the company forecast annual profit above market expectations for the fourth time this year. Genmab rose 12% after it reported encouraging follow-up data from a mid-stage trial of an experimental colorectal cancer treatment.
Meanwhile, a survey by the Ifo institute showed German business morale improved more than expected in October. Germany's benchmark index gained 0.9%.
Most major STOXX sector indexes traded higher. Defence stocks led with a 2.6% gain, travel and leisure stocks rose 1.9%, and the energy index dipped 0.2%. Portugal's Galp Energia, however, fell 10.8% after saying talks with Spain's Moeve to combine their refining, chemicals and fuel retail businesses had collapsed.
Central banks take the spotlight
Investor attention now turns to decisions from the European Central Bank and the US Federal Reserve, due later this week. The ECB is set to meet on Thursday, with a pause widely anticipated after it raised rates in June and September to counter rising inflation as the Iran war pushed up energy prices. Economists polled by Reuters expect a quarter-point rate hike in December.
According to Daniela Hathorn, senior market analyst at Capital.com: "This is a week to not pile into the market."
Jonas Goltermann, chief markets economist at Capital Economics, said the week may well be dominated by continued jitters around the sustainability of the AI equity boom.
Source: Investing.com (Reuters)
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