Investing.com – European stock markets headed higher on Monday, benefiting from increased risk sentiment as crude oil prices fell, at the start of a week of event risks.
At 11:05 ET (15:05 GMT), shares in Germany were trading 0.3% higher, shares in Britain were up 0.4% and those in France were up 0.7%.
Risk sentiment got a boost
Sentiment was boosted on Monday by the cooling geopolitical situation in the Middle East, after Israel’s weekend airstrikes on Iran did not target oil or nuclear facilities as feared.
“Israel’s more targeted response leaves the door open for de-escalation,” ING analysts said in a note. “While it remains unclear whether and how Iran will retaliate, the administration has downplayed the damage caused by Israel’s response.”
Key economic data to follow
Elsewhere, Monday was thin on economic data, but investors will look to the release of the euro zone’s third quarter data later in the week to show how aggressively the European Central Bank will cut rates in the future.
The ECB has already cut rates three times this year, all by 25 basis points, but speculation is growing that ECB policymakers will agree to a bigger rate cut at the next meeting.
Data released earlier Monday showed Ifo’s indicator of German export expectations fell to minus 6.7 points in October from minus 6.5 points in October, with the automotive and metals sectors expecting the heaviest losses in international trade.
Britain’s new Labor government will also unveil its first budget on Wednesday, while the much-discussed monthly official US jobs report will be published on Friday.
Philips lowers sales forecast for 2024
There are more corporate earnings to digest in Europe this week, culminating in Philips (AS:) results on Monday.
Shares of the Dutch medical device maker fell 17% after the company cut its revenue forecast for the year due to declining demand in China, causing order intake to fall 2% in the third quarter.
Philips now expects comparable sales to grow 0.5% to 1.5% in 2024, compared to a previous expectation of 3% to 5%.
However, much of the focus this week will be on the results of five of the ‘Magnificent Seven’ US technology stocks that have played a major role in driving market gains in recent years.
Google parent Alphabet (NASDAQ:) will report on Tuesday, followed by Microsoft (NASDAQ:) and Facebook parent Meta Platforms (NASDAQ:) on Wednesday and Apple (NASDAQ:) and Amazon (NASDAQ:) on Thursday.
Crude oil is falling due to reduced tensions
Oil prices fell sharply on Monday after Israel’s retaliatory strike on Iran over the weekend bypassed Tehran’s oil and nuclear facilities, easing geopolitical tensions in the Middle East.
At 11:05 AM ET, the contract was down 5.1% at $71.78 per barrel, while futures (WTI) traded 5.2% lower at $68.03 per barrel.
Traders feared that any attacks on Iran’s oil and nuclear infrastructure would mark a serious escalation of the conflict, potentially disrupting oil supplies from the oil-rich region.
Iran downplayed the impact of the attack but still threatened retaliation.
The strike has caused traders to price in a risk premium to crude prices and put the focus back on demand, which is expected to weaken in coming months.
