(Sharecast News) - European equities were in the green at the close on Monday as investors looked ahead to the final round of interest rate decisions this year, including from the European Central Bank.
The pan-European Stoxx 600 rose 0.74% to 582.54, supported by broad-based advances across major markets.
Germany's DAX added 0.18% to 24,229.91, France's CAC 40 climbed 0.7% to 8,124.88 and London's FTSE 100 outperformed, gaining 1.06% to 9,751.31.
UK equities were underpinned by strength in mining stocks, with Russ Mould, investment director at AJ Bell, noting that "despite a sell-off in Asia, the FTSE 100 got off to a strong start on Monday, supported by higher precious metals prices," adding that "the continuing surge in gold and silver helped lift Endeavour Mining and Fresnillo, and there was broader strength in the mining sector, despite weak Chinese data."
Focus remained firmly on central banks, with ECB President Christine Lagarde telling the Financial Times the bank was likely to raise its growth forecasts again in December, having lifted its GDP outlook to 1.2% in September.
The ECB is widely expected to keep interest rates unchanged at 2% this week, while the Bank of England, Sweden's Riksbank and Norway's Norges Bank are also due to announce policy decisions.
Patrick Munnelly, market strategy partner at TickMill, said markets had largely priced in a Bank of England move, with "analysts forecast[ing] a potential interest rate reduction by the Bank of England later in the week," citing a Reuters survey pointing to "a tight 5-4 vote in favour of lowering the benchmark rate from 4.0% to 3.75%."
Investors are additionally watching for a backlog of delayed US economic data following the federal government shutdown, including a jobs report on Tuesday and inflation figures on Thursday, which Mould said "will be closely watched given the uncertainty around the trajectory of rates in 2026."
Eurozone industrial production strengthens, Switzerland raises growth forecast
On the economic front, eurozone industrial production posted its strongest monthly increase in five months in October, rising 0.8% month on month after a 0.2% gain in September, marking the first back-to-back expansion since March.
On an annual basis, output grew 2%, a five-month high and slightly above expectations.
The rebound was broad-based across sectors and helped ease concerns over the impact of higher US tariffs, even as eurozone exports continue to face a 15% levy.
ING said the figures showed that "the battered eurozone industry is showing signs of life," while cautioning that structural challenges remain and that the data support the ECB's view that downside risks to growth have eased.
Elsewhere, Switzerland slightly raised its 2026 growth forecast after reaching a preliminary agreement with the United States to reduce tariffs on Swiss goods.
Government forecasters now expect GDP growth of 1.1% next year, up from 0.9%, before accelerating to 1.7% in 2027 as global demand recovers.
While the outlook for exporters improved, officials warned that risks linked to trade tensions, financial markets and geopolitics remain elevated, echoing broader global concerns flagged by Munnelly, who said "global appetite for risk has diminished due to concerns about whether tech companies, which have driven global indices to record highs, can sustain their inflated valuations amidst rapid AI spending."
In the UK, data painted a mixed picture.
Consumer sentiment weakened after the autumn Budget, with the S&P Global Consumer Index slipping to 44.7, its lowest level since April, as households reported softer expectations for finances and rising job insecurity.
Separately, Nationwide said UK house prices are likely to rise by 2% to 4% next year as affordability improves amid easing interest rates, while Halifax forecast more modest growth of 1% to 3%, citing improving wage dynamics and lower borrowing costs.
Munnelly added that "markets believe that easing inflation strengthens the argument for a rate cut," after recent data showed UK inflation falling to 3.6% in October, with further declines expected.
Healthcare, defence stocks in the red
In equities, healthcare and defence stocks weighed on sentiment.
ArgenX fell 3.93% after halting a phase three trial for its thyroid eye disease treatment, while Sanofi dropped 2.8% after its multiple sclerosis drug failed to meet a key trial endpoint and the US regulator delayed a decision.
European defence names including Rheinmetall, Renk and Hensoldt also closed lower following signals of a potential shift in Ukraine's NATO ambitions, with UK defence heavyweight BAE Systems down 0.18%, in line with what Munnelly described as "the broader downturn in the European defence sector."
In pharmaceuticals, Hikma Pharmaceuticals fell 1.4% after announcing that CEO Riad Mishlawi would step down, a move Russ Mould said was unsurprising given that "the most damaging part of last month's trading statement was the reduction in medium-term profit growth expectations - which forced a broader reassessment of the investment case than a mere blip in trading would have done."
Offsetting some of the weakness, shares in the Magnum Ice Cream Company surged 6.62%, while GSK rose 0.6% after the European Medicines Agency recommended its depemokimab drug for approval.
Reporting by Josh White for Sharecast.com.
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