European Stocks Kick Off the Week Higher

European stocks opened the week higher, with the STOXX 50 gaining 0.8% and the STOXX 600 rising 0.6%, recovering some ground after a weak previous week. Sentiment was supported by falling oil prices, as investors weighed resilient flows through the Middle East against escalating regional tensions, including attacks on Saudi Arabia, and a US claim that Russia and Ukraine had agreed to an “energy ceasefire”. Investors are also preparing for the start of earnings season, with ASML and LVMH set to report quarterly results this week. Banking stocks led the gains, while utilities also advanced, whereas energy shares came under pressure. HSBC rose 2.1%, Banco Santander gained 1.8%, BBVA added 1.6% and BNP Paribas climbed 1.0%. Automakers Renault and Stellantis were among the top performers, advancing 3.1% and 2.5%, respectively. Nordex jumped 3.8% after reporting a 30% year-on-year increase in project intake in the third quarter.

European equity markets were poised to open higher on Monday as falling oil prices lifted sentiment after President Donald Trump said Moscow had agreed to release diesel supplies to global markets and claimed that Russia and Ukraine had reached an “energy ceasefire” effective immediately. However, escalating tensions in the Middle East continued to weigh on investor confidence, as a deadly attack on Riyadh’s airport prompted Trump to consider joining Saudi Arabia in retaliatory action against Houthi militants in Yemen. Meanwhile, the European economic calendar is relatively quiet, with no major data releases scheduled, while French luxury goods group LVMH is set to report earnings. Investors are also looking ahead to Wednesday’s results from Dutch semiconductor equipment maker ASML Holdings for fresh insights into demand related to artificial intelligence. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were both up around 0.3%.

European stocks closed higher on Friday, with the STOXX 50 gaining 0.7% and STOXX 600 adding 1% as easing oil prices and bond yields lifted market sentiment. US President Donald Trump said Washington would not launch an attack on Iran before the November midterm elections, citing productive talks aimed at ending the conflict. Meanwhile, AI sentiment also improved following reports that OpenAI expected its annualized revenue to reach or exceed $70 billion by year-end. Telecom stocks, however, came under pressure. Deutsche Telekom fell 7% after SpaceX struck a deal to acquire a nationwide portfolio of low-band spectrum, intensifying competition with traditional wireless operators in the US. Deutsche Telekom owns a 54% stake in T-Mobile US. Vodafone dropped 3%, while Orange and Telefónica each declined 2%. Meanwhile, LSEG IBES data showed expectations for European Q3 earnings growth rising to 21%, up from 19.4% a week earlier, ahead of the start of the earnings season.