European shares began the week on a positive note, driven by rising global oil prices and encouraging earnings reports, though a decline in Reckitt shares limited gains. The pan-European STOXX 600 index increased by 0.3% as of 0832 GMT on Monday, following slight gains the previous week.
Oil and gas stocks led the charge, advancing 1.4% due to higher crude prices after a rocket strike in the Israeli-occupied Golan Heights. Investors are gearing up for a busy week, with a focus on the U.S. market where four of the ‘Magnificent 7’ companies are set to report, potentially influencing market sentiment significantly.
Additionally, the U.S. Federal Reserve’s policy meeting on Wednesday has traders speculating that the central bank may set the stage for a rate cut in September. Arun Sai, senior multi-asset strategist at Pictet Asset Management, noted that this week could determine the market tone for the summer, as it will reveal central banks’ approaches to the trade-offs they are facing.
Investors remain cautious after a global tech selloff last week triggered by underwhelming results from Tesla and Alphabet. Sai pointed out that expectations of strong earnings beats similar to the past few quarters might lead to disappointment, as seen last week.
Among individual stocks, Philips surged 10.3% following its quarterly results that exceeded estimates, driven by higher earnings and successful restructuring efforts. Germany’s Merck saw a 3.3% rise in its shares after the company raised its forecast, bolstered by strong performances in its healthcare and electronics divisions.
JPMorgan European Discovery Trust plc (LON:JEDT) is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.
