Europe ends slightly up as earnings season distracts investors from Catalonia crisis

Key Points
  • The pan-European Stoxx 600 finished up 0.16 percent provisionally, while the majority of sectors ended in the black
  • Spain's biggest political crisis in decades moves into a decisive week Monday, as Madrid seeks to impose its control over the restive region

European markets posted modest gains by Monday's close, as investors pored over fresh corporate earnings and tried to shake off any concerns surrounding Spain's ongoing constitutional crisis.

The pan-European Stoxx 600 came off its session highs by the close, yet finished up 0.16 percent provisionally, while the majority of sectors ended in the black.

The U.K.'s FTSE 100 closed up 0.02 percent by the close, while the German DAX popped 0.09 percent. France's CAC 40, however, rose 0.27 percent by the end of the trading day.

Technology was crowned Europe's top performing sector Monday, jumping 1.31 percent, with almost all of its stocks finishing in the black. German-listed Software roared ahead, jumping 4.85 percent after both UBS and Independent Research raised their target prices on the stock.

Sticking with the top of the STOXX 600, engineering firm GKN rose over 5 percent following a report by The Sunday Times which stated that the U.K. company was looking into potentially splitting into two listed firms — one business being aerospace and the other being automotive.

Earnings season continued to be in full swing Monday, as a whole host of corporates posted their latest figures. Dutch health and technology firm, Philips, reported that its core profits rose 12 percent to 532 million euros ($626.11 million) in the third quarter. Its shares rose over 1 percent on the news.

Securitas meanwhile surged 3.6 percent after it reported better-than-expected earnings over the weekend. The security services group said it gained market share in the U.S. while core earnings were in line with expectations.

In commodities, basic resources outperformed other major sectors, on the back of an uptick in metal prices; with Sweden's Boliden hitting the top of the sector's benchmark. The miner popped 3.6 percent after Credit Suisse raised its rating on the stock from "neutral" to "outperform".

Meanwhile, not all was well when it came to ratings modifications. IWG slipped over 3 percent, after Credit Suisse and Berenberg both cut their ratings on the London-listed stock, following a recent trading update that the company issued.

Media stocks fell 0.49 percent with Mediaset slipping to the bottom of the STOXX 600, off 3.8 percent after a board member of the Italian group said Monday that the board of Mediaset had yet to receive a draft for a possible agreement with France's Vivendi, Reuters reported.

Catalonia crisis

Spain's biggest political crisis in decades moved into a decisive week on Monday, as Madrid seeks to impose its control of the restive region.

The Spanish government has urged Catalans to accept its decision to dismiss their secessionist leadership amid speculation that the regional President, Carlos Puigdemont, is planning to press ahead with a unilateral declaration of independence. Spain's IBEX slipped 0.6 percent on Monday.

Populism still rearing its ugly head in Europe: Chantico Global

Europe's banking index dipped into the red in afternoon deals, as Spain's banks led the losses amid ongoing political uncertainty. BBVA, Bankia and Banco de Sabadell were all more than 1 percent lower by Monday's close. Banks as a whole slipped 0.49 percent.

The relatively calm mood in Europe was in stark contrast to Japan, after Prime Minister Shinzo Abe looked to have comfortably won in national elections over the weekend. Shares jumped on a weaker yen as Abe's government looked set to deliver more policy stimulus.

Meanwhile in the States, U.S. stocks were relatively mixed by Europe's market close on Monday,as investors digested the latest batch of corporate figures, amid the busiest week of the earnings season.

On the data front, U.K. business optimism dropped for the first time in a year during the last quarter, according to a survey released by CBI on Monday.