European stock markets experienced gains on Monday as investors responded favorably to the announcement that U.S. President-elect Donald Trump intends to nominate billionaire hedge fund manager Scott Bessent for the position of Treasury Secretary.
Bessent, an advocate for equity markets, is also recognized for promoting deficit reduction. His stance on the gradual implementation of Trump's proposed tariff increases is anticipated to mitigate inflationary effects.
"Compared to some of Trump's campaign rhetoric, Bessent is perceived as less aggressive on tariffs," noted Russ Mould, AJ Bell's Investment Director. This optimistic market sentiment was further fueled by the anticipation of an interest rate cut by the European Central Bank (ECB). Chief Economist Phillip Lane emphasized the necessity for monetary policy to avoid being overly restrictive, adding that efforts to combat inflation remain incomplete.
Automaker stocks advanced following reports of progress between China and the EU on potentially eliminating tariffs on Chinese electric vehicle (EV) imports into the EU.
The pan-European Stoxx 600 rose by 0.06%, while the U.K.'s FTSE 100 increased by 0.36%. Germany's DAX climbed 0.43%, and France's CAC 40 saw a marginal uplift of 0.03%. Conversely, Switzerland's SMI declined by 0.32%.
Elsewhere in Europe, the markets in Austria, Belgium, Finland, Greece, Ireland, Norway, Poland, Portugal, Spain, and Turkey finished higher.
Denmark, Iceland, and Russia showed weakness, while the Netherlands and Sweden remained unchanged.
In the UK market, JD Sports Fashion shares surged by 10% following an improved rating. Entain advanced by 5.56%, and EasyJet rose approximately 4.25%.
Other notable gainers included Barratt, Redrow, Prudential, IAG, Vistry Group, 3i Group, Halma, Barclays Group, BT Group, Glencore, Centrica, Persimmon, Standard Chartered, Frasers Group, Spirax Group, ICG, and Hikma Pharmaceuticals, all rising between 1.5% and 4%.
Anglo American Plc shares found some support after Peabody Energy secured a victory in a competitive bid to acquire the company's Australian steelmaking coal mines for $3.78 billion.
Rentokil Initial saw a near 2% gain after announcing that Paul Edgecliffe-Johnson will join the Board as Chief Financial Officer starting January 1, 2025.
Conversely, Kingfisher dropped by 13.25% after lowering its profit forecast. The firm now projects an adjusted profit before tax between £510 million and £540 million, down from the previously estimated range of £510 million to £550 million. The company anticipates ongoing market uncertainty in the near term.
Elsewhere, Fresnillo ended down by about 3%, and BAE Systems fell 2.7%. BP, Shell, Endeavour Mining, Severn Trent, Haleon, Schroders, and Relx also closed with losses, though they were less severe.
The German market saw gains for Adidas, Porsche, Sartorius, BMW, Siemens, Continental, Puma, Infineon, Siemens Healthineers, Brenntag, Fresenius Medical Care, Mercedes-Benz, BASF, Deutsche Bank, Vonovia, Siemens Energy, E.ON, and Hannover Rueck, with increases between 1% and 3%.
Commerzbank suffered a near 5% decline. German Finance Minister Joerg Kukies stated on Sunday that he does not expect UniCredit to pursue a takeover of the German bank due to opposition from the Berlin government.
MTU Aero Engines, Rheinmetall, Daimler Truck Holding, and Symrise recorded declines ranging from 1% to 2%.
In France, Kering and STMicroElectronics closed over 5% higher. Meanwhile, Hermes International, Accor, Dassault Systemes, Stellantis, LVMH, Edenred, Eurofins Scientific, L'Oreal, and Vivendi gained between 1% and 3%.
Thales decreased by approximately 5%. TotalEnergies, Engie, Danone, Credit Agricole, Societe Generale, and Sanofi experienced declines of 0.8% to 2%.
Regarding economic updates, Germany's business sentiment dipped in November due to a marked worsening of current conditions amid deepening economic challenges, as reported by the ifo Institute. The business climate index decreased to 85.7 in November from 86.5 in the preceding month, while analysts had anticipated a moderate drop to 86.0. The current situation index plummeted to 84.3, marking the lowest point since July 2020.
