by Diana Mandia

(Reuters) – European stock markets ended higher on Monday as trade tensions and fears over U.S. regional banks eased, while investors await a fresh shower of corporate results later in the week.

In Paris, the CAC 40 gained 0.39% to 8,206.07 points around 4:01 p.m. GMT. In Frankfurt, the Dax gained 1.80% and in London, the FTSE 100 increased by 0.52%.

The EuroStoxx 50 index ended with a gain of 1.31%, the FTSEurofirst 300 gained 1.01% and the Stoxx 600 gained 1.03%.

The decline in concerns about American regional banks and the escalation of trade between the United States and China allowed stock markets on Monday to position themselves before a new series of corporate results, starting with luxury giant L’Oréal and Kering on Tuesday and Wednesday.

On Wall Street, leading companies such as Tesla, Netflix or Intel are also due to publish their quarterly results this week, in a context where stocks, especially those exposed to the AI ​​sector, are trading at high levels.

Investors are also awaiting U.S. consumer price data, due Friday. However, they will arrive late, the partial closure of the federal administration, which has lasted since October 1, having disrupted the publication schedule of official economic data.

In France, where the government escaped censure last week, budget debates are once again at the forefront, with the draft budget for 2026 beginning its high-risk parliamentary journey before the National Assembly’s Finance Committee on Monday.

While financial markets welcomed the rejection of motions of no confidence against the French government last week, the respite from weeks of political chaos could be short-lived unless budget negotiations find the savings needed to reduce the deficit. For the moment, the surprise downgrade of France’s credit rating on Friday by S&P Global Ratings has had virtually no impact.

VALUES

BNP Paribas plunged 7.7% to finish bottom of the CAC 40, with traders and analysts attributing this decline to the decision of an American federal jury, which on Friday found the French bank guilty of helping the Sudanese government commit abuses by providing services that violated American sanctions.

Kering, on the other hand, took 4.8%, the parent company of Gucci having announced on Sunday evening the sale of its beauty division to the French cosmetics giant L’Oréal for an amount of four billion euros.

Forvia, which reported on Monday a 3.7% drop in its turnover in the third quarter due to negative currency effects and a decline in its main Chinese customers, lost 4.46%.

European aerospace groups Leonardo, Airbus and Thales gained between 1.65% and 4.3%, while according to two sources, they concluded a framework agreement on a proposed merger of their satellite activities.

The defense sector advanced 2.73%, recovering from the sharp decline recorded on Friday, when the announcement of a planned summit between Donald Trump and his Russian counterpart Vladimir Putin on the war in Ukraine shook the sector.

A WALL STREET

At closing time in Europe, the Dow Jones gained 0.78%, the Standard & Poor’s 500 0.98% and the Nasdaq Composite 1.41%.

Apple gains 3.71% and approaches $4 trillion in market capitalization as analysts are optimistic about demand for the iPhone 17.

TODAY’S INDICATORS

In Germany, producer prices, a key indicator of inflation, fell more than expected in September year-on-year, show data from the Federal Statistical Office published on Monday.

CHANGES

The dollar moved little on Monday, after reaching its two-week low on Friday amid fears about the American banking system.

The greenback gains 0.05% against a basket of reference currencies

The euro appreciated slightly by 0.07% to 1.1659 dollars, thanks to the easing of political tensions in France and the easing of commercial and banking fears.

RATE

Euro zone bond yields had a rather quiet session on Monday, with concerns over trade tensions and the health of regional US banks having eased.

The ten-year German Bund yield rose 0.7 basis points to 2.5841%. The two-year advanced one basis point to 1.9234%.

In France, the ten-year OAT yield ended with a gain of 0.3 basis points at 3.3642%.

OIL

Oil prices are falling under pressure from concerns about a supply glut.

Brent lost 0.88% to $60.75 per barrel and American light crude (West Texas Intermediate, WTI) lost 0.78% to $57.09.

(Writing by Diana Mandiá, editing by Kate Entringer)

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