European Shares Rise Ahead Of Central Bank Meetings

European stocks rose notably on Monday, with earnings optimism, the ruling party’s solid victory in Japan’s parliamentary election, easing travel curbs in Australia and Thailand, and stabilizing coal prices in China boosting sentiment.

Monetary policy tightening remains the key market focus, with investors now looking ahead to the Federal Reserve meeting on Wednesday for clues on the timing of its first interest rate hike since December 2018.

Fed Chair Jerome Powell has already acknowledged substantial further progress on inflation (price stability) and also maximum employment for QE tapering.

On Thursday, attention turns to the Bank of England policy meeting. Market participants are pricing in a rate hike to curb inflation but economists narrowly predict no change.

The pan European Stoxx 600 rose 0.6 percent to 478.51 after ending flat with a positive bias on Friday.

The German DAX jumped 0.9 percent, France’s CAC 40 index rallied 1.1 percent and the U.K.’s FTSE 100 was up 0.6 percent.

Swiss drug major Novartis rose over 1 percent. The U.S. Food and Drug Administration approved Scemblix (asciminib) for the treatment of chronic myeloid leukemia in two distinct indications.

French pharmaceutical company Sanofi climbed 1.8 percent after HSBC upgraded the stock to “buy.”

Danish jewelry maker Pandora slumped 6.2 percent despite lifting its 2021 outlook.

Commercial landlord Land Securities was marginally higher in London after it agreed to buy property regeneration company U&I Group in a £190m deal. Shares of the latter jumped as much as 72 percent.

Airline Ryanair held steady after narrowing its first-half loss.

Barclays declined 1.7 percent. The lender said that its chief executive Jes Staley will step down following U.K. regulators’ investigations into his relationship with U.S. Financier and convicted sex offender Jeffrey Epstein, who committed suicide in U.S. jail in 2019.

German automaker Volkswagen rose about 1 percent amid reports that Skoda Auto is resuming production following a two-week outage caused by a shortage of semiconductor chips.

In economic releases, investors shrugged off data showing that Germany’s retail sales declined unexpectedly in September.

Germany’s retail turnover decreased 2.5 percent month-on-month in September, reversing a 1.2 percent rise in August, Destatis reported. Economists had forecast a monthly growth of 0.6 percent.

On a yearly basis, retail sales declined 0.7 percent, in contrast to the 0.9 percent increase in the previous month. Sales were forecast to advance 1.8 percent.

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