Europe close: Stocks inch higher but gains limited on a quiet day

(Sharecast News) - European stock markets finished with minor gains on Monday after struggling for direction for most of the session, with very little economic data or newsflow to sway market sentiment either way. The Stoxx 600 index closed just 0.1% or 0.44 points higher at 456.26, with less than two points separating the intraday high and low.

Indices in London and Frankfurt were in the red, while Milan and Paris stocks edged higher. Stocks in Madrid, however, jumped 0.8% after a decent performance in the banking and utilities sectors.

Nevertheless, Europe's muted finish came despite a positive start on Wall Street, with the three main indices in the US putting in strong gains with the Dow Jones Industrial Average near a two-month high.

"For the most part, European equities take their lead from the US in terms of direction. But they generally drag their heels when it comes to the size and speed of market movements, particularly on the way up," said analyst David Morrison from Trade Nation.

Economic data meets expectations

In economic news, the People's Bank of China kept its main interest rates unchanged, as widely expected, leaving the one-year loan prime rate (LPR) and five-year LPR remaining steady at 3.45% and 4.20% respectively.

Closer to home, German producer prices declined by 0.1% in October, following a 0.2% fall the previous month and in line with consensus forecasts. The annual rate of decline eased to -11% from -14%.

Meanwhile, construction output in the eurozone rose 0.4% during the month of September, rebounding after a 1.1% drop in August. However, the annual rate of change fell to -0.3% from -1.1%.

Bayer and Julius Baer drop

Shares in German drugs-to-pesticides group Bayer tumbled to a 12-year low on Monday after revealing it had pulled the pin on a large late-stage trial testing a new anti-clotting drug. Bayer aborted its phase III trial on asundexian early on the back of a recommendation from the Independent Data Monitoring Committee, which concluded the candidate was less effective than the current standard treatment, apixaban. The stock finished nearly 18% lower.

Shares in Julius Baer tanked 12% in Zurich after the Swiss private-banking group warned that annual profits would fall short of last year. The firm said, following a rise in credit provisions in November and an increase in the effective tax rate, net profits this year will be lower than 2022's result of CHF950m - which was the second highest in group history.

There were some big movers on London's FTSE 100, with Diploma surging 12% and Ashtead dropping 10%. Industrial products supplier Diploma expressed confidence in current-year forecasts after a solid set of annual results, with adjusted operating profits growing by a quarter; while construction group Ashtead tumbled after lowering full-year revenue and profit forecasts, blaming a quieter hurricane season, and the writers' and actors' strikes in the US.

Spain's Ibex 35 was the outperformer of the day in Europe on the back of strong gains from the banking sector (Bankinter, Caixabank and Banca Sabadell) and utilities sector (Telefonica, Cellnex and Enagas).