Europe midday: European markets steady ahead of mega‑cap tech results, key rate calls

(Sharecast News) - European equities were mostly higher at lunch time on Monday as investors stayed cautious ahead of a heavy week for megacap tech earnings and key centralbank decisions.

As of 1200 GMT, the pan-regional Stoxx 600 index was up 0.42% at 683.43 while the DAX was 0.83% firmer at 25,390.97, the CAC traded 0.71% higher at 7,838.04 and the IBEX 35 was 0.19% softer at 18,954.10.

Oil prices eased early on Monday, with Brent crude futures down 1.57% at $114.89 a barrel, offering some relief to energyimporting markets after the internation benchmark surged to its highest close since mid2022 last week on the back of Houthi attacks on Saudi infrastructure. Reports of Qatariled diplomatic efforts in Tehran helped temper crude.

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. 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.

European tech shares were steady after last week's sharp declines, with attention fixed on US 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.

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. The latest survey pointed to gradually improving sentiment in Europe's largest economy, even as firms continue to grapple with record fuel costs following the recent energy price shock. The expectations index improved to 91.6 from 90.4, signalling a more upbeat outlook among businesses. However, the current conditions index slipped to 88.8 from 89.5, suggesting that while companies were feeling more optimistic about the months ahead, assessments of present conditions remain under pressure.

Reporting by Iain Gilbert at Sharecast.com