European Markets Rise As Oil Falls On Iran Peace Hopes

(RTTNews) - The major European markets closed on a firm note on Monday as inflation concerns eased after oil price fell sharply on hopes the ongoing discussions involving Iranian Officials and Qatari mediators will help achieve a breakthrough in Middle East peace efforts.

Investors also digested the final data showing the regional PMI reading for the month of October, and looked ahead to the Bank of England's monetary policy announcement this week.

French stocks moved up despite Fitch's warning that France's debt outlook is worsening. The Fitch report expressed doubts about the country's ability to sustainably restore its public finances after the 2027 presidential election.

Oil prices fell sharply as ongoing discussions involving Iranian officials and Qatari mediators have raised hopes of possible breakthrough that could ease supply concerns and improve the outlook for global energy markets.

Traders were also reacting to reports suggesting that U.S. President Donald Trump wants to give diplomacy with Iran more time before resuming strikes.

Brent crude front-month futures fell to $105 a barrel, down more than 7.5% from previous close.

The pan European Stoxx 600 climbed 0.42%. The UK's FTSE 100, Germany's DAX and France's CAC 40 gained 0.29%, 0.63% and 0.98%, respectively. Switzerland's SMI ended 0.05% down.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Ireland, Spain, Sweden and Turkiye closed higher.

Greece, Netherlands, Norway, Poland, Portugal and Russia ended weak, while Iceland closed flat.

In the German market, MTU Aero Engines rallied nearly 5%. Heidelberg Materials, Infineon, Siemens Energy and Adidas gained 2.3%-4%.

Symrise, Deutsche Bank, Siemens, Mercedes-Benz, Vonovia, Continental, Hochtief, Porsche Automobil Holding, Deutsche Post, Scout24 and Gea Group moved up 1%-2%.

Fresenius gained more than 2% after the company signed an exclusive biosimilars development agreement with China's WuXi Biologics.

Rheinmetall dropped about 4.4%. Deutsche Boerse ended nearly 2% down. Bayer, Deutsche Telekom and RWE also ended notably lower.

In the French market, Safran climbed 4.3%. Saint-Gobain ended nearly 4% up. ArcelorMittal, STMicroElectronics, Accor, Hermes International and Stellantis moved up 2%-3.5%.

Michelin, Unibail Rodamco, Teleperformance, Airbus, Legrand, Pernod Ricard, LVMH, Vinci, BNP Paribas, Schneider Electric, EssilorLuxottica, Kering and Societe Generale also posted impressive gains.

TotalEnergies ended nearly 2.5% down, hurt by weak oil prices. Thales ended 1.4% down.

Alstom shares nosedived 27%. The French train maker cut its profit and cash flow forecasts for the second time since April and also revised down its sales forecast for the 12 months to March to between 2% and 4%, from about 5% previously.

In the UK market, Miners Antofagasta and Fresnillo climbed by 4.8% and 4.7%, respectively. Anglo American Plc gained nearly 3.5%. Bank stocks Natwest Group, Barclays and Lloyds Banking Group gained 2.3%-2.6%.

St. James's Place, Kingfisher, Weir, JD Sports Fashion, IAG, Howden Joinery Group, Barratt Redrow, Rolls-Royce Holdings, Airtel Africa, 3i, Pershing Square Holdings, Informa, British Land Company, ICG, Reckitt Benckiser, Coca-Cola HBC, Diageo, Whitbread and Tritax Big Box REIT also moved up sharply.

FirstGroup jumped 7%. The U.K. bus and rail operator has agreed to sell five West Yorkshire depots and 330 buses to the regional transport authority for £109m and won two bus franchise contracts that are expected to generate around £40m of annual revenue.

Energy stocks Ithaca, BP and Shell lost 5.9%, 4.6% and 3%, respectively.

Polar Capital Holdings dropped more than 6%. Vodafone Group, Centrica and GSK closed lower by 1.3%-1.7%.

In economic news, the euro area manufacturing activity expanded at a solid pace in October despite slowdown in factory order growth and intensifying supply-chain pressures, final purchasing managers' survey data from S&P Global showed.

The final manufacturing Purchasing Managers' Index fell to 52.7 in October from 52.9 in the previous month, which was the highest score since May 2022. The reading was above the flash estimate of 52.4.

Among big four economies, Germany and Spain reported stronger growth, surpassing respective survey averages. France and Italy were the only two euro area member states to buck the broader expansion trend.

Germany's manufacturing activity registered solid growth in October despite a resurgence in cost pressures. The final factory PMI posted 54.2, in line with estimate, and up from 53.9 in September.

France's manufacturing activity fell back into contraction in October amid falling production, demand, employment and intensifying cost pressures. The factory PMI dropped to 49.5 from 50.6 in the previous month. The flash reading was 49.3.

Italy's manufacturing sector declined deeper into contraction with stronger declines in new orders and output. At 49.4, the factory PMI was down from 50.4 in September. Meanwhile, Spain's manufacturing sector expanded at the fastest pace in over a year during October. The factory PMI registered 52.2, up from 51.0 in the previous month.

Data from Destatis showed retail sales in German dropped 2% on a monthly basis in September, in contrast to the 1.2% increase seen in August. Sales were forecast to grow 0.4%. On a yearly basis, the decline in retail sales deepened to 2.3% from 0.3% in the prior month.

UK manufacturing activity expanded the most in five months in October as output and new orders gathered pace amid improving demand in both domestic and overseas markets, final purchasing managers' survey data from S&P Global showed.

The manufacturing Purchasing Managers' Index rose to a five-month high of 52.8 in October from 51.9 in the previous month. The score was unchanged from the flash estimate.

Business optimism rose to an eight-month high in October despite several firm raising concerns about possible government policy changes and the high-cost environment.