Europe close: Stocks gain as investors eye central bank meetings, oil retreats

(Sharecast News) - European stocks rose solidly across the board on Monday as oil prices retreated and investors positioned for some key central-bank decisions and megacap tech earnings.

The Stoxx Europe 600 benchmark finished the session up 0.8% at 640.66, helped by solid gains in Frankfurt and Milan in particular.

Market sentiment was boosted by falling oil prices, with Brent crude futures down 0.8% to $115.81 a barrel and WTI down 1.2% to $101.99. Oil prices had spiked at the end of last week amid growing fears Donald Trump would resume US attacks on Iran after the mid-term elections. But they eased off highs during Monday trading ahead of Tehran hosting senior officials from Saudi Arabia, Pakistan and Turkey for talks about regional security.

However, even with Monday's pullback, elevated energy benchmarks kept traders on edge ahead of policy calls from the Federal Reserve, European Central Bank and Bank of Japan, on Wednesday, Thursday and Friday, respectively.

The Fed was expected to hold rates, though markets now price an 80% chance of a December hike, while Frankfurt and Tokyo were seen following similar paths, with both central banks likely to stay put this week before tightening again later in the year.

"The European Central Bank is [...] set to remain on the sidelines with little need to chase its hiking cycle further right now amid the steep sell-off in French bond yields and widening in Franco-German spreads to record levels," said Neil Wilson, UK investor strategist at Saxo.

"The key thing to look out for will be any signs from Christine Lagarde that the ECB is worried about French debt spillovers and the central bank's willingness to close spreads."

Attention was also shifting towards this week's scheduled earnings from Microsoft, Alphabet and Amazon. Investors will now keep a keen eye on hyperscaler capex guidance amid concerns that aggressive AIinfrastructure spending may not deliver nearterm returns - a key pressure point for European chipequipment suppliers such as ASML and ASM International. The Amsterdam-listed stocks finished with solid gains on Monday.

In other equity movements, Danish biotech Genmab surged 12% after results from a late-stage colorectal cancer drug trial impressed investors.

In the UK, shares in Computacenter also jumped after the technology and services provider said it had delivered another strongerthanexpected quarter and lifted fullyear guidance.

Meanwhile, Spanish constituents Telefonica and Santander were out of favour on the back of their heavy exposure to Brazil after president Lula's surprise re-election, which lead to a sharp sell-off in Brazilian equities and the real.

In other news, French assets found some respite after Moody's opted not to downgrade the country's sovereign rating on Friday, easing pressure on 10year yields, which had briefly topped 5% - their highest level since 2002.

On the macro front, Spanish industrial prices rose 18.3% in the year ended 30 September, according to the country's National Statistics Institute, while industrial prices rose 4% in September `alone.

Elsewhere, Germany's Ifo business climate index ticked higher in October, rising to 90.2 - its strongest reading since May 2023 and a touch above expectations of 90.