(Bloomberg) -- European stocks gained on Monday as traders looked forward to major earnings releases and reacted to a report from China giving more details on plans for fiscal stimulus.
The Stoxx Europe 600 Index gained 0.5% at the close in London, with technology stocks gaining the most and the consumer sector showing the biggest decline. The market moved higher after Caixin reported that China may issue 6 trillion yuan ($847 billion) worth of treasury bonds in next three years.
Travel and leisure stocks underperformed, with Entain Plc sliding as much as 15%, pushing gambling stocks lower, after a report that UK Chancellor Rachel Reeves was considering as much as £3 billion ($3.9 billion) of new taxes on the sector.
Among other single stocks, investment manager Ashmore Group Plc rose after it reported an improvement in flows for the first quarter. Swiss industrial company Bossard Holding AG slumped after it reported a sales miss.
While data so far point to a gentle cooling in the euro-area economy, rather than a rapid downturn, concerns are mounting about French finances and Germany’s lackluster economy. According to a Bloomberg survey, Germany is suffering a mild recession, and output across the whole of 2024 will be flat — underscoring the malaise in Europe’s largest economy.
The downturn is likely to prompt the European Central Bank to cut interest rates this week. Investors are also trying to gauge the full impact of China’s stimulus blitz. Over the weekend, Beijing hinted at greater government borrowing to support the economy, but fell short of giving a headline dollar figure.
While European stocks are still trading near record highs, the benchmark has made little headway in recent weeks. It has remained within 1.5% of its 100-day moving average since mid-May, near a historical low for the past three decades.
“There is the distinct possibility that seasonal weakness that is often seen in September but which was avoided this year, has been delayed and that October will turn out to be a more volatile period for markets,” said Daniel Murray, Zurich-based chief executive officer of EFG Asset Management.
Some of Europe’s largest companies, such as LVMH and ASML Holding NV, are set to report this week, starting on Tuesday.
“Until we get greater clarity on the state of the macro cycle and its influence on the outlook for earnings, European equities may well remain rangebound,” added Murray.
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--With assistance from Jan-Patrick Barnert and Rheaa Rao.
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