European stocks close higher as focus stays on global trade talks

Key Points
  • Stocks were buoyed Friday by a positive jobs report out of the U.S., but caution is expected to return on Monday with a fresh round of U.S.-China trade talks due to commence later this week.

European markets climbed Monday afternoon as traders looked for hints on the direction of Brexit and U.S.-China trade talks, with Friday's positive U.S. jobs data still boosting stocks.

The pan-European Stoxx 600 provisionally gained 0.74%, led by a 0.4% rise for chemicals and energy stocks while media and financial services continued to lag.

Stocks were buoyed Friday by a positive jobs report out of the U.S. which eased fears of a slowdown in the world's largest economy. Investor focus is now attuned to trade developments, with a fresh round of U.S.-China talks due to commence later this week.

Asian stocks traded mixed Monday afternoon as investors await direction on how the negotiations will likely unfold. Bloomberg News reported on Sunday that Chinese officials have narrowed the scope of issues they intend to discuss, with Vice Premier Liu He reportedly telling dignitaries that Beijing will not commit to reforms of industrial policies or government subsidies.

Back in Europe, British Prime Minister Boris Johnson on Sunday urged French President Emmanuel Macron to "push forward" to secure a Brexit deal and reiterated his intention for the U.K. to leave the EU on October 31. Macron said the EU will decide at the end of the week whether a deal is going to be possible based on Johnson's latest proposal, which has been widely rebuffed in Brussels.

AMS bid for Osram rejected by shareholders, Osram CFO says

In corporate news, the Financial Times reported on Sunday citing two people briefed on the matter that HSBC is planning to cut up to 10,000 jobs in a bid to reduce costs.

Austrian chipmaker AMS said on Friday that its takeover bid for German lighting group Osram had failed, falling short of the required 62.5% shareholder agreement. Osram Licht stock fell 3.3% by the end of trade, while AMS slipped 0.9% lower.

On the data front, German industrial orders for August fell by more than expected on weaker domestic demand, reinforcing fears that a manufacturing slump is leading Europe's largest economy toward recession.

Euro zone Sentix data, measuring investor sentiment, fell to -16.8 in October from -11.1 in September, hitting its lowest since April 2013.

In terms of individual stocks, Vifor Pharma shares rose 4.99% during the session, closely followed by 4.86% gains for Norwegian energy industry data provider TGS Nopec.

British joinery firm Howden fell 3.0%, hitting its lowest for over a month at one stage.