On Monday, European stocks experienced an upturn as concerns regarding geopolitical tensions, inflation, and interest rate forecasts diminished. The escalating Middle East conflict showed signs of easing, as Iran and Israel carried out calculated counterattacks, causing no casualties. It has also emerged that neither country is interested in engaging in a full-scale war, which could trigger heightened conflict.
With oil prices steadily decreasing, anxieties over inflation and the future of interest rates also lessened. Investors now eagerly anticipate the release of a series of U.S. economic data and notable tech earnings this week, which will provide clues about future market movements.
The cumulative European Stoxx increased by 0.6%. The U.K.'s FTSE 100 rose by 1.62%, Germany's DAX grew by 0.7%, and France's CAC 40 concluded with a 0.22% increase. Meanwhile, Switzerland's SMI made a marginal gain of 0.28%.
Other European markets, including Austria, Belgium, Denmark, Finland, Greece, the Netherlands, Poland, Portugal, Russia, Spain, and Sweden, also exhibited growth. However, stock markets in Iceland, Norway, and Turkey experienced a downturn.
In the UK, Marks & Spencer saw a notable 4.4% rise. Other companies like Pershing Square Holdings, Sainsbury (J), Vodafone Group, Ocado Group, Next, and HSBC Holdings gained anywhere from 3% to 4.2%. After introducing the first phase of its £1 billion share buyback, Tesco's value increased by over 3%.
Despite a rocky start due to an investigation concerning its apparent violations of Iranian sanctions, Standard Chartered managed to improve its standing by the close of the day. However, companies like Fresnillo, Antofagasta, ICG, Smith (DS), and Anglo American Plc reported significant to moderate losses.
Meanwhile, Fresenius Medical Care took the lead in Germany's market with a rise of over 6%, while other companies made gains within the range of 1% to 2.5%. Contrastingly, Zalando, Infineon, RWE, Daimler Truck Holding, Adidas and Heidelberg experienced losses.
In terms of economic data, the Eurostat reported a slight drop in the Eurozone's government deficit to GDP ratio for 2023. The ratio decreased to 3.6% in 2023 from 3.7% in 2022. Despite this decrease, the ratio still surpasses the 3% threshold. Simultaneously, the ratio in the EU rose to 3.5%, up from 3.4%. The report also showed that the region's government debt to GDP slid from 90.8% in 2022 to 88.6% by the end of 2023, with the EU's debt to GDP also dropping to 81.7% from 83.4%.
