Written by Paolo Laudani, Ankika Biswas, and Johan M. Cherian
(Reuters) – European stocks ended volatile trading in the red on Monday ahead of a series of big corporate results, although stable oil prices boosted the energy sector.
The continent as a whole fell 0.6%, with the real estate sector leading the way with a nearly 2% drop, while energy stocks led the gains as oil prices stabilized after falling 7% last week. [O/R]
Stock exchanges in the top German, French, Italian and Spanish markets ended down 0.6-1%.
The STOXX index ended last week higher after the European Central Bank cut interest rates on Thursday, following gains the previous week.
Lithuania's Central Bank Governor Gediminas Simkus said on Monday that the ECB may have to cut interest rates below “natural” levels if falling inflation takes hold.
Meanwhile, all eyes are on Deutsche Bank, Lloyds (LON:), and Barclays, which will begin reporting their financial results this week.
Russ Mold, investment director at AJ Bell, said the market will focus on the relative increase in loan impairments among U.S. banks.
German software giant SAP, which accounts for 15% of the country's benchmark, will further shape tech stocks when it reports third-quarter results later on Monday.
“In terms of market capitalization alone,[SAP's performance]will receive an unusual amount of attention and scrutiny, and after the disappointment of ASML (AS:), people will look for reassurance in another big stock. We’re going to turn our heads,” Mold said.
Last week, lackluster financial results from semiconductor equipment makers triggered a global sell-off in semiconductor stocks.
Investors are also focused on polls showing former President Donald Trump is increasingly likely to win the Nov. 5 U.S. presidential election, which could be a blow to Europe's economy. . These odds were reflected in “Trump trading” such as the US dollar and the virtual currency Bitcoin.
Insurance stocks were among the bearish markets on Monday, with little upside expected, as Munich Re fell 3% after Jefferies downgraded the stock's rating to “hold.”
Coffee and tea maker JDE Peet's jumped 16.3% to top the STOXX 600 index after appointing a new chief executive and confirming its outlook for 2024.
Forvia rose 5.2% after the French auto parts supplier won new contracts with Chinese automakers BYD (SZ:) and Xiaomi (OTC:).
sanofi (NASDAQ:) fell nearly 1%. The French pharmaceutical company announced it has entered into exclusive negotiations to sell a 50% controlling stake in its consumer health business Opera to US private equity firm Clayton, Dubilier & Rice.
Switzerland's SGS fell 2.3% after RBC downgraded its stock to “underperform.”
