European stocks closed higher on Monday afternoon as U.S. and Chinese trade negotiators prepare to meet in Shanghai for the first in-person trade talks since a truce was agreed in June.
The pan-European Stoxx 600 restored early gains to close 0.14% higher as markets reacted positively to a series of potential mergers and earnings. Telecoms and financial services stocks closed with 1.5% and 1.7% climbs respectively, while autos struggled to make headway, falling 0.9%.
Expectations for progress during the impending two-day meeting in Shanghai are low, and White House economic advisor Larry Kudlow told CNBC on Friday that negotiators would "hopefully go back to where the talks left off last May."
Investors will also be awaiting the U.S. Federal Reserve's monetary policy meeting this week, with the Fed widely expected to cut interest rates by 25 basis points.
New British Prime Minister and Conservative Party leader Boris Johnson plans to visit Scotland on Monday after the head of the Scottish Conservatives said that she would refuse to support the U.K. leaving the European Union without a deal. The Confederation of British Industry (CBI) also said on Sunday that the EU was lagging behind Britain in its preparation for a no-deal Brexit.
In corporate news, mergers and acquisitions are high on the agenda. Reuters reported on Sunday that U.S. buyout fund Blackstone Group is expected to announce the merger of its majority-owned financial data firm Refinitiv with the London Stock Exchange Group this week. The merger is expected to face a long antitrust review before it can be signed off. LSE Group stock climbed 15%.
The Financial Times has also reported a potential tie-up between food delivery companies Just Eat and Takeaway.com to form a £9 billion ($10 billion) group which would outsize both Uber Eats and Deliveroo. Just Eat's stock surged 27% by mid-afternoon, also boosting peers such as Delivery Hero, which rose 5.3%.
As earnings season rumbles on, Ryanair on Monday reported a 21% fall in first-quarter net profit due to lower fares and higher costs, but reiterated its full-year guidance. Its first-quarter profit came in slightly ahead of analyst forecasts, but the company's stock erased early gains to fall 0.3% during the afternoon session.
Heineken half-year profit missed expectations on higher costs, with the Dutch drinks company reporting a net profit of 1.05 billion euros, causing its share price to slide 6.2%.
Spain's Bankia saw its second-quarter net profit fall 32% due to lower trading income, causing its stock to fall 2% by mid-afternoon.