European Stocks Little Changed to Kick Off the Week

European stocks closed higher on Monday, halting the sharp selling from the three previous sessions as markets reassessed the magnitude of the energy supply shock from the Persian Gulf. The Eurozone's STOXX 50 gained 0.4% to 5,740 and the pan-European STOXX 600 rose 0.5% to 599. Oil prices pulled back slightly after LPG tankers crossed the Strait of Hormuz towards India, reflecting Tehran's leniency on energy exports to selected countries that could ease the ongoing energy crunch that triggered inflationary concerns worldwide. Financial companies rose to track their country's bond prices, with Allianz and Deutsche Bank gaining 1.5%. Meanwhile, UniCredit added 0.5% after making a €35 billion offer for Commerzbank (8.5%), which was immediately opposed by the German government, a minority owner of the bank, but paving the way for UniCredit to increase its steak in the German lender rom the current 26% ownership. Lastly, chip producers rose worldwide, supporting ASML with a 1.5% increase.

European stocks rebounded on Monday afternoon, with the STOXX 50 rising 0.7% and the STOXX 600 gaining 0.6%, supported by a global market recovery and easing oil prices. Treasury Secretary Bessent said the US is allowing Iranian oil tankers to transit the Strait of Hormuz, while President Trump is urging other nations to help ensure the waterway remains open. Still, uncertainty persists over when the conflict could end. At the same time, traders are bracing for a week packed with central bank decisions, including those from the Federal Reserve and the European Central Bank. Financials were among the top-performing sectors, with Commerzbank shares jumping nearly 9% after UniCredit launched an offer to raise its stake to more than 30% in the German lender without seeking control. Shares of UniCredit were up 0.9%, although the German government dismissed the move as “unacceptable.” ASML Holding (+2%) and HSBC Holdings (+2.1%) also posted strong gains.

Both the STOXX 50 and the STOXX 600 were little changed at the start of the week, as markets appeared to stabilise even though traders remain focused on the conflict involving Iran. Strikes continue and oil prices are rising, but US President Trump increased pressure on nations to help reopen the Strait of Hormuz and said the US was in talks with Iran. At the same time, traders are bracing for a week packed with central bank decisions, including those from the Federal Reserve and the European Central Bank. The energy sector led the gains and defense stocks were also higher. HSBC Holdings (+0.5%), Shell (+0.7%), Unilever (+0.8%) and TotalEnergies (+0.4%) advanced, while Commerzbank (+3.6%) was among the top performers after UniCredit launched an offer to raise its stake to more than 30% in the German lender without seeking control. Shares of UniCredit were up 0.8%. On the downside, Roche (-0.2%), Novartis (-0.4%) and AstraZeneca (-0.7%) traded lower.