By Sukriti Gupta and Purvi Agarwal
(Reuters) -European shares closed at record highs for the third consecutive session as signs of easing Sino-U.S. trade tensions buoyed global risk appetite, while declines in healthcare shares limited gains.
The continent-wide STOXX 600 index closed up 0.2%, while other major regional indexes were flat to slightly higher.
Italy’s benchmark index outperformed peers with a 1% rise, boosted by heavyweight bank stocks.
Meanwhile, global risk appetite was lifted after U.S.
President Donald Trump said the U.S. and China are set to “come away with” a trade deal, as he is expected to meet his Chinese counterpart later this week to decide on the framework of a trade deal hashed out over the weekend.
A deal would pause steeper U.S.
tariffs and Chinese rare earths export controls.
“Some positive developments between the U.S. and China seem to be boosting sentiment towards the market… that’s a good place to start…,” said Michael Field, chief equity analyst at Morningstar.
European banks and the tech sector rose 1.2% each.
Conversely, healthcare stocks fell 0.5%.
Novartis fell 0.9% after the drugmaker said on Sunday it agreed to acquire U.S. biotech firm Avidity Biosciences for about $12 billion in cash. Roche declined 1.4% after a Jefferies rating downgrade.
Investors are focused on central bank policy meetings this week for clues on their interest rate trajectory.
The U.S. Federal Reserve is widely expected to cut interest rates by a quarter percentage point at its Wednesday meeting, with bets amplifying after Friday’s softer-than-expected inflation report.
The European Central Bank is expected to hold rates steady later this week.
“The ECB is in a relatively comfortable position. Inflation continues to hover around the 2% target. The economic situation is mixed… (but) we expect headwinds to fade next year,” said Felix Schmidt, senior economist at Berenberg.
Schmidt also said that a rebound in euro zone inflation will force the ECB to hike rates from mid-2027 onwards.
Porsche AG rose 3% after the luxury carmaker reported on Friday an adjusted operating loss that was smaller than the market had feared.
Shares in Sydbank rose 5.5% after the Danish bank agreed to a merger deal with Vestjysk Bank and Arbejdernes Landsbank.
London-listed shares of HSBC Holdings pared declines to end flat after saying it will book a $1.1 billion provision in its third-quarter results after losing part of an appeal in a lawsuit tied to Bernard Madoff’s Ponzi scheme.
Separately, a survey showed German business morale rose in October.
(Reporting by Sukriti Gupta and Purvi Agarwal in Bengaluru; Editing by Mrigank Dhaniwala and Shailesh Kuber)
