European stock markets traded mostly higher on Monday, extending their recovery from four-month lows reached in the previous session, as declining oil prices and easing geopolitical concerns supported investor sentiment.
The rebound followed comments from US President Donald Trump dismissing speculation about potential military action against Iran ahead of the US midterm elections, helping to ease concerns about a further escalation of tensions in the Middle East.
Expectations of a possible energy ceasefire between Russia and Ukraine also contributed to lower crude oil prices, providing some relief to European markets amid continued uncertainty over global energy supplies.
Eurozone government bond yields declined alongside oil prices after Trump announced an agreement to obtain diesel from Russia as part of efforts to reduce fuel costs.
The US president also blamed Ukraine for the conflict and the resulting energy crisis, marking a significant shift in his administration’s public position ahead of the midterm elections.
Investors were also preparing for a series of important US economic releases and corporate earnings announcements later in the week.
Particular attention will be directed towards US consumer and producer price inflation figures, which could influence expectations for Federal Reserve monetary policy and the outlook for interest rates.
Among the major European benchmarks, Germany’s DAX Index and the UK’s FTSE 100 Index both advanced 0.9%, while France’s CAC 40 Index gained 0.5%.
Banking stocks were among the stronger performers, with Commerzbank (TG:CBK), Deutsche Bank (TG:DBK), BNP Paribas (EU:BNP) and Lloyds Banking Group (LSE:LLOY) recording gains of between 1% and 2%.
The advances contributed to broader market strength as investors reassessed the outlook for economic growth, borrowing costs and corporate earnings.
In Germany, wind turbine manufacturer Nordex Group (TG:NDX1) recorded a sharp increase in its share price after reporting a 29.5% rise in third-quarter orders.
The improvement in order intake provided a positive indication of demand for the company’s wind energy equipment, supporting investor interest in the renewable energy manufacturer.
Automotive group Stellantis (BIT:STLAM) also posted substantial gains after announcing a strategic shift towards more affordable electric vehicles at the Paris Motor Show.
The announcement highlighted the company’s efforts to address vehicle affordability and changing consumer demand as competition intensifies across the electric vehicle market.
However, not all European stocks participated in the market recovery.
Shares of British recruitment company Hays (LSE:HAS) fell sharply after the group reported a 3% decline in first-quarter like-for-like net fees, reflecting continued pressure on recruitment activity.
The update contrasted with gains elsewhere in the market and highlighted the uneven operating conditions facing European companies.
European equities remained supported by lower energy prices and reduced immediate geopolitical concerns, although investors continued to monitor developments in the Middle East and Eastern Europe.
Upcoming US inflation figures and corporate earnings reports are expected to provide further indications of the economic outlook and the potential direction of global financial markets.
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