By Ozan Ergenay and Johann M Cherian
(Reuters) – European stocks edged higher on Monday, with caution over tensions in the Middle East at the forefront, while Temenos was on course for its best day in more than 15 years after saying the Hindenburg allegations Research was found to be incorrect.
The pan-European STOXX 600 index gained 0.3% by 0853 GMT, with the defense sector among the biggest gainers, after Iran launched explosive drones and missiles at Israel over the weekend in retaliation for a alleged Israeli attack on its consulate in Syria on April 1.
Fiona Cincotta, senior market analyst at City Index, said that while the geopolitical news should set the tone for the market this week, the fact that the United States has said it will not support Israel’s retaliation for the moment calmed the market. slightly.
At the same time, the industrial and automotive sectors led sectoral gains after economic institute Ifo said German manufacturers were no longer seriously affected by material shortages, with the supply situation almost back to normal. what it was before the coronavirus pandemic.
Temenos jumped 19.8%, outpacing STOXX, after the software company said a “special committee” formed by its board of directors found accusations in a Hindenburg Research report to be incorrect and misleading.
By mid-April, the STOXX 600 Index is on track to mark its first month of six losses, as uncertainty over the timing of U.S. interest rate cuts and the possible fallout from geopolitical tensions dominate the feeling.
In addition to the gains, policymaker François Villeroy de Galhau said over the weekend that the European Central Bank was increasingly confident of victory in the fight against inflation, making a cut in interest rates very likely. interest in June.
Later today, investors will analyze remarks from central banker Phillip R. Lane.
The earnings season is expected to accelerate with results from sector heavyweights LVMH, Noika, Ericsson and ASML expected throughout the week.
Among other things, Ageas climbed 3.2% as France’s BNP Paribas announced it had reached an agreement with Chinese group Fosun to acquire its 9% stake in the Belgian insurer for around 730 million euros (777 .60 million dollars).
Adidas rose 4.3% after brokerage Morgan Stanley upgraded the German sportswear maker from “underweight” to “overweight”, while Julius Baer slipped 5% as manager Swiss fortune was trading ex-dividend.
Shares of Prysmian SPA rose 5.2% after the Italian cable company announced plans to acquire Encore Wire for $290 per share in cash.
Logitech International fell 2.8% after Morgan Stanley cut the Swiss-American computer equipment maker from “underweight” to “equal weight.”
($1 = 0.9388 euros)
(Reporting by Ozan Ergenay and Johann M Cherian; editing by Sohini Goswami)