(Bloomberg) -- European stocks edged toward an August record high as investors weighed the outlook for economic growth and monetary policy. Commerzbank AG fell as Germany said it was opposed to a takeover.
The Stoxx Europe 600 Index gained 0.4% by the close. Autos and retail stocks led the advance, although so-called defensive sectors including food, beverage and tobacco, utilities and real estate also outperformed.
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The banking index was the biggest laggard, with Commerzbank slumping 5.7%. Germany’s statement that it opposed the takeover of a bank followed an announcement by UniCredit Spa that it had increased its stake in the German lender, deepening a rift between the government and the Italian bank.
Europe’s benchmark index has declined this month — and is less than 2% below its August record high — on worries about a recession as well as seasonal headwinds. Investors are looking for the next catalysts following the Federal Reserve’s interest-rate cut last week.
The euro area’s private-sector economy shrank for the first time since March, according to data released Monday, with a deepening manufacturing downturn heightening concerns that the region’s recovery has run out of steam.
Also on Monday, China announced plans for a rare briefing on the economy by three top financial regulators just as it cut one of its short-term policy rates, fueling speculation officials are preparing to ramp up efforts to revive growth.
China’s rate reduction “will provide a little uplift in sentiment but the really important news is going to be the press conference and economic briefing tomorrow,” said Joachim Klement, a strategist at Panmure Liberum. “Markets are clearly hoping for significant stimulus measures and any more dithering would be bearish.”
France’s CAC 40 underperformed as investors weighed continued political uncertainty. President Emmanuel Macron’s new government sparked an immediate angry reaction from across the political spectrum, raising the risk of a swift collapse that would further cloud the outlook for the country’s stretched public finances.
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--With assistance from Michael Msika.
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