LONDON — European markets turned higher Monday as investors digested a dip in euro zone inflation and looked ahead to a key policy decision from the Bank of England.
The Stoxx 600 closed 0.2% higher after preliminary data showed headline inflation in the euro zone fell to 5.3% in July. New euro zone growth figures also showed economic activity picking up in the second quarter of this year.
The benchmark index gained 1.9% in July, according to Eikon data.
Most sectors were in positive territory Monday, with healthcare stocks gaining 1.1% and oil and gas up by 1.3%. Food and beverage stocks weighed on the other end, down 1.2%.
The new inflation figures mark a fall from June's headline rate of 5.5%, providing some relief for policymakers. The European Central Bank's Christine Lagarde signaled last week that the bank was "open minded" about whether it would raise rates in September as inflation shows signs of easing.
The Bank of England is widely expected to raise interest rates by at least 25 basis points when it convenes Thursday for its latest policy meeting. The move would mark its 14th consecutive rise as U.K. inflation remains high, having fallen only slightly to 7.9% in June.
Asia-Pacific markets were mostly higher Monday even as investors continued to contemplate the implications of a surprise decision Friday by the Bank of Japan to allow "greater flexibility" on bond yields — a move seen as a signal for an eventual policy shift. Japan's Nikkei rose 1.0% Monday, edging closer to its recent three-decade peak.
Stateside, U.S. stocks were modestly higher. The S&P and the tech-heavy Nasdaq Composite are both on track for their fifth straight winning months, rising 3.8% and 3%, respectively, in July.
Back in Europe, the Netherlands' Heineken, France's Legrand and the U.K.'s Pearson all report earnings Monday.
Oil on pace for best month since January 2022
Oil prices are set to cap off their best month in more than a year.
Brent crude is up nearly 14.2% for the month, while West Texas Intermediate crude has gained 14.8%. The last time both benchmarks posted a gain this big was in January 2022, when they added more than 17.2% each.
Prices also hover near their highest level since April 17.
— Samantha Subin, Gina Francolla
U.S. stocks open little changed
Bank of Japan's tweak signals a 'significant' shift toward normalization, portfolio manager says
Hani Redha, global multi-asset portfolio manager at PineBridge Investments, says it's a move that's unlikely to be reversed "given the backdrop of inflation at the global level."
Our performance was supported by Ireland's resilient economy, says Bank of Ireland CEO
Myles O'Grady, CEO of the Bank of Ireland, discusses its results and the outlook for the rest of the year.
Euro zone inflation dips to 5.3%, economy shows resilience
Euro zone inflation fell to 5.3% July, according to preliminary data released Monday. It marks a decline from the 5.5% registered in June, providing some relief for policymakers as they continue their fight against inflation.
Separate data released Monday also showed that euro zone gross domestic product accelerated in the second quarter, expanding by 0.3% — higher than the 0.2% expected.
— Karen Gilchrist
Stocks on the move: Heineken down 5%, Genmab up 2.5%
Dutch drinks maker Heineken fell 5% after cutting its profit growth forecast for this year as higher prices deterred customers, particularly in Asia-Pacific — the country's most profitable region.
The company fell to the bottom of the Stoxx 600 in early deals, leading a wider downturn in food and beverage stocks, with British online retailer Ocado also falling almost 5%.
On the other end of the European benchmark, Danish biotech company Genmab rose 2.5% after reporting increased revenue and operating profits for the first half of the year.
— Karen Gilchrist
European stocks head for a lower open
European stocks are set to open in negative territory Monday, according to IG data.
The U.K.'s FTSE 100 was seen down 33 points at 7,662, France's CAC was poised for a 24 point drop at 7,467, and Germany's DAX was expected to open 30 points lower at 16,445.
— Karen Gilchrist
CNBC Pro: China’s electric car game amps up. One stock has doubled this year
Just as Chinese electric car companies may need cash, foreign automakers need the market — not only in China but globally.
Xpeng's cash and cash equivalents nearly halved in the first quarter from the end of 2022, and its deliveries have stagnated at several thousand a month.
Volkswagen isn't faring much better in China's electric car market, with an average of just over 10,000 vehicles delivered each month in the first half of the year. But the German automaker has far more cash.
— Evelyn Cheng
CNBC Pro: Analysts love these cheaper stocks from the U.S. and beyond — giving one nearly 100% upside
The market rally has been strong this year, but there are still some relatively cheap stocks.
CNBC Pro screened for stocks that are cheaper than those in the broader S&P 500 and MSCI World indexes, with at least 20% upside.
— Weizhen Tan
CNBC Pro: Morgan Stanley's Slimmon names top tech picks to buy after earnings season
However, according to Andrew Slimmon, a lead senior portfolio manager at Morgan Stanley Investment Management, those are all reasons to be a "little cautious" coming out of the busiest week for earnings.
Slimmon also shared some of the tech picks to buy after earnings season.
— Ganesh Rao