STOXX 600 subdued with key earnings on tap; energy shares jump

By Paolo Laudani and Ankika Biswas

(Reuters) -European shares struggled for direction on Monday, after two back-to-back weekly gains, ahead of a series of marquee corporate earnings, although stabilising oil prices buoyed the energy sector.

The continent-wide STOXX 600 was unchanged at 0845 GMT, having swung between slight gains and losses.

The index ended higher last week after the European Central Bank cut interest rates on Thursday and, according to Austria’s central bank governor, is set to get inflation under control.

Polls showed rising odds of former President Donald Trump winning the Nov. 5 U.S. elections, which is seen as bruising to the European economy. Those odds were reflected in Trump trades such as the U.S. dollar and cryptocurrency bitcoin.

Trump is quite keen on imposing tariffs, especially on China, but also on other trading partners including Europe, (which is) bad news for Europe,” said Andrea Cicione, head of research at GlobalData.TSLombard.

If Trump wins the Presidency, but Republicans also win the House and the Senate, then it’s going to be a lot easier for Trump to implement his policies.

European companies with U.S.-heavy exports will be of interest in the run-up to the elections, Cicione said, as will be cyclical sectors likely to benefit from any improvement in the U.S. economy following rate cuts.

Deutsche Bank, Lloyds and Barclays will kick off earnings reporting for the heavily weighted financials sector this week.

German software behemoth SAP, which comprises 15% of the country’s benchmark DAX index, will further set the tone for tech stocks when it reports third-quarter earnings after the market closes.

Meanwhile, energy stocks led sectoral gains with a 1% jump as oil prices stabilized after a 7% drop last week. [O/R]

On the flip side, insurance stocks were among the losers as Munich Re fell more than 2% after Jefferies cut its rating on the stock to “hold”, expecting little upside.

In single stocks, coffee and tea company JDE Peet’s jumped 17% after it appointed a new chief executive and confirmed its 2024 outlook.

Forvia climbed 9% after the French car part supplier secured new deals with Chinese automakers BYD and Xiaomi.

Switzerland’s SGS fell 2.6% after RBC cut its rating on the testing and inspection company’s stock to “underperform.

(Reporting by Paolo Laudani in Gdansk and Ankika Biswas in Bengaluru; Editing by Savio D’Souza)