European stocks gained on Monday, rebounding from a second straight weekly decline, as investor attention turned to a pivotal European Central Bank meeting this week.
The Stoxx 600 index was up 0.3% by the close, after earlier rallying as much as 0.9%. Most industry sub-groups were in the green, with the construction, technology and telecom sectors outperforming, while health declined.
Sentiment was boosted by data showing Asia’s factory activity continued its expansion in May, supported by a recovery in new orders even as China’s rebound struggled to gain traction.
Health-care stocks headed lower amid a slate of corporate news in the sector. GSK Plc shares plunged in the wake of a court ruling that the UK drugmaker, and others including Sanofi, must face trials over whether the former heartburn treatment Zantac causes cancer. The company will seek to appeal the ruling.
Genmab A/S shares edged higher after analysts were impressed by the Danish biotechnology company’s presentation on its acasunlimab therapy in patients with previously treated metastatic non-small-cell lung cancer.
European stocks face seasonal headwinds in June, when the benchmark index has typically dropped more than 1% on average over the past two decades. Still, risk appetite is being supported by wagers that the world’s most influential central banks will cut interest rates this year, beginning with the European Central Bank on Thursday.
“The week will be dominated by the ECB rate decision, even though they have telegraphed a first rate cut,” said Liberum strategist Joachim Klement. “Rate cuts should weaken the euro and support European exporters today and for the rest of the week.”
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Published: 03 Jun 2024, 11:02 PM IST