European markets began the week on a positive note Monday, tracking broad gains across Asia and rebounding from last week’s losses, as investors turned their focus to a packed week of corporate earnings.
Germany’s DAX index surged 1%, France’s CAC 40 gained 0.5%, and the UK’s FTSE 100 added 0.4%, following a sharp selloff on Friday triggered by renewed concerns over the US banking sector.
Those worries eased after shares of US regional banks rebounded at the end of last week, helping restore some market confidence.
Japan’s Nikkei hits record high
The upbeat tone in Europe was underpinned by sharp gains in Japan, where the benchmark Nikkei 225 index jumped more than 3% to a record high above 49,000 points.
The rally came as local media reported that Japan’s ruling Liberal Democratic Party had secured sufficient support from its coalition allies to form a new government under Sanae Takaichi.
Takaichi, widely regarded as a fiscal dove, is expected to favour higher government spending and resist additional interest rate hikes from the Bank of Japan.
A parliamentary vote confirming her appointment as Japan’s first female prime minister is expected on Tuesday.
China’s growth slows but beats expectations
Elsewhere in Asia, China’s economy grew in line with expectations in the third quarter, though the pace of expansion was the slowest in a year amid persistent disinflation and ongoing trade tensions with the United States.
Official data from the National Bureau of Statistics showed that gross domestic product expanded 4.8% year-on-year in the three months to September 30.
However, the figure marked a slowdown from the 5.2% growth recorded in the previous quarter and was the weakest annual rate since the third quarter of 2024.
German prices show limited inflationary pressure
Back in Europe, data from Germany showed producer prices fell 0.1% month-on-month in September, translating to a 1.7% year-on-year decline.
The figures highlight subdued price pressures in the eurozone’s largest economy, underscoring ongoing challenges for policymakers seeking to balance weak inflation with signs of economic stagnation.
In corporate news, shares in luxury group Kering were expected to be in focus after the company announced over the weekend that it would sell its beauty division to L’Oréal for €4 billion ($4.66 billion).
The divestment is aimed at reducing debt and sharpening Kering’s strategic focus on its core fashion labels under new CEO Luca de Meo.
The transaction marks one of the first major portfolio decisions since de Meo took the helm, signalling an emphasis on streamlining operations amid a challenging environment for high-end consumer goods.
While Monday marked a relatively quiet start to the earnings week, activity is expected to pick up with several key reports due over the coming days.
L’Oréal is set to release its results on Tuesday, followed by updates from SAP, Barclays, and Heineken on Wednesday.
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