European Stocks Set for Muted Open

European stocks opened the second week of August on a mixed-to-positive note, with the STOXX 50 edging 0.2% higher to set a new record, while the STOXX 600 traded around the flatline, remaining close to the record levels reached last week. The indices gained 2.6% and 1.7%, respectively, in the previous week. Investor sentiment remained cautious amid ongoing uncertainty in the Middle East, with markets awaiting further clarity on the prospects of a deal between the US and Iran. The technology sector was among the top performers, with ASML Holding rising 1.5% and Infineon Technologies gaining 2.1%. Luxury stocks also advanced, with LVMH up 1% and Hermes adding 0.4%. On the downside, Vistry plunged more than 8% to the bottom of the STOXX 600 after the FT reported that Allianz Trade is reducing the credit cover it provides to Vistry’s suppliers. The move could further intensify pressure on the cash flow of the struggling UK housebuilder.

European equity markets were poised for a subdued open on Monday as investors assessed lingering uncertainty over efforts to reopen the Strait of Hormuz, keeping inflation risks and the interest rate outlook firmly in focus. Iran said talks with Oman were approaching an agreement but denied holding any direct negotiations with the US, despite Washington’s claims that a deal was close. Meanwhile, the economic calendar remains light, with investors instead turning their attention to earnings from Alcon, GEA Group and Sisecam, among others. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures hovered near the flatline, though both benchmarks remained close to record highs after posting strong gains last week.

European stocks closed higher on Friday, tracking similar developments in major equity markets amid a rebound for industrial and tech stocks. The Euro STOXX 50 added 0.4% to 6,530 and the STOXX Europe 600 rose 0.4% to 661. Software producers and AI-related infrastructure manufacturers rose for a second session, tracking US counterparts with SAP gaining 4.1%, while Infineon and Siemens rose nearly 3% each. Meanwhile, Sanofi and Argenx each gained 1.3% to close a strong weak for the European pharmaceutical sector. On the other hand, Allianz fell 1.6% despite generating a record profit on both its insurance and asset management business in the second quarter. Likewise, Munich Re dropped 1.5% despite reporting higher profits in the period.