Easing Inflation Concerns Lift European Market Sentiment

(RTTNews) - European stocks closed higher on Monday as easing concerns about inflation due to a drop in oil prices helped underpin sentiment. Hopes that diplomatic efforts will help ease tensions in West Asia contributed as well to the positive mood in the markets.

Oil prices fell sharply amid reports of diplomatic efforts to reduce tensions in West Asia. A Qatari delegation arrived in Tehran on Sunday as part of renewed diplomatic efforts to de-escalate reginal tensions in coordination with the United States.

Saudi Arabia partially resumed operations at King Khalid International Airport in Riyadh on Sunday, even as Yemen's Iran-aligned Houthis vowed to keep striking the facility, calling it a "military target."

In an interview with Fox News' Sunday Morning Futures, U.S. President Donald Trump said it's "getting to be decision time" on whether he will make a deal with Tehran or resume attacks.

Brent crude front-month futures dropped to $109.22 a barrel before recovering to around $110 (still down notably from previous close of $111.70 a barrel) by the time European stock markets closed.

Meanwhile, investors looked ahead to central bank meetings this week. The Federal Reserve, the European Central Bank and the Bank of Japan are scheduled to make their monetary policy announcements.

The pan European Stoxx 600 climbed 0.77%. The UK's FTSE 100 gained 0.72%, Germany's DAX and France's CAC ended higher by 0.91% and 0.83%, respectively. Switzerland's SMI settled 0.53% up.

Among other markets in Europe, Czech Republic, Denmark, Finland, Greece, Ireland, Norway, Poland, Russia, Spain, Sweden and Türkiye closed higher. Netherlands edged up marginally.

Iceland and Portugal ended weak, while Austria and Belgium closed flat.

In the UK market, Computacenter soared more than 11%. The technology and services provider has lifted its full-year guidance after reporting stronger-than-expected third-quarter results. The company said that it now expects FY26 adjusted pre-tax profits of no less than £425 million, compared with current analyst consensus of £387.1 million.

Babcock International surged 6.6% and Rolls-Royce Holdings climbed 5.7%. IAG, Antofagasta, Intercontinental Hotels Group, BAE Systems, Diploma, JD Sports Fashion, Melrose Industries, Standard Chartered, Barclays, Weir, Ithaca Energy, IMI, Kingfisher, Burberry Group, Polar Capital Holdings gained 2.5%-4%.

Smiths Group, Natwest Group, Fresnillo, Anglo American Plc, British American Tobacco, Metlen Energy & Metals, 3i, Next, St. James's Place and Lloyds Banking Group also moved up sharply.

Experian shed more than 6%. Auto Trader Group, The Sage Group, Relx, SSE, Smith & Nephew, BP and LSEG lost 1%-2.5%.

In the German market, Bayer climbed 3.5% after its prostate cancer drug Nubeqa demonstrated a 58% reduction in the risk of disease progression or death in high-risk patients. Bayer also announced that China has approved the drugmaker's blood thinner 'asundexian.'

Siemens Energy jumped nearly 4.5%. Infineon, Hochtief, MTU Aero Engines, Deutsche Bank, Commerzbank, Deutsche Post, Daimler Truck Holding, Rheinmetall and RWE gained 2%-3.7%.

Symrise, Deutsche Telekom, Beiersdorf, Scout24, Heidelberg Materials, SAP and BASF closed weak.

In the French market, Hermes International rallied 3.3%, lifted by higher earnings. The company reported first-half revenue of €8.2 billion, up 6% year-on-year.

Stellantis moved up more than 3.5%. STMicroelectronics climbed 3%. Societe Generale, BNP Paribas, Thales, Engie, Michelin, Schneider Electric, AXA, Vinci, Legrand, Eurofins Scientific, Bouygues, Veolia Environment, Accor, Credit Agricole, Renault, Unibail Rodamco, LVMH and Saint-Gobain also closed with strong gains.

Bollore rose over 2 percent after reporting solid group revenue results for the third quarter and nine-months of 2026.

EssilorLuxottica dropped 3.3%. Edenred drifted lower by 2.3% and Publicis Groupe ended down 1.4%.

In economic news, Germany's Ifo Business Climate Index edged up to 90.2 in October, its highest level since May 2023, slightly exceeding market expectations of 90.0.

The expectations index rose to 91.6 from 90.4, while the current conditions index declined to 88.8 from 89.5, indicating a more optimistic outlook despite deteriorating assessments of present economic conditions.