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LONDON — European stocks closed higher Monday as investors assessed banking deals and German and French business activity data.
The pan-European Stoxx 600 index ended 0.4% higher, with most sectors and major bourses in positive territory. Autos stocks led the gains, up over 1.9% from the previous session.
Shares of Commerzbank fell around 5.7% after German Chancellor Olaf Scholz criticized UniCredit’s “hostile” and “unfriendly” move on the bank, Reuters reported.
His comments come shortly after Italy’s UniCredit announced it had increased its stake in the German lender to around 21% and submitted a request to boost the holding to up to 29.9%.
“UniCredit believes that there is substantial value that can be unlocked within Commerzbank, either stand-alone or within UniCredit, for the benefit of Germany and the bank’s wider stakeholders. However, as was the case for UniCredit, such potential requires action for it to be crystalized,” the bank said on Monday.
The Stoxx 600 had traded lower earlier in the day after French preliminary composite PMI data, a measure of business activity in the manufacturing and services sector, fell in September.
It came in at 47.4, an eight-month low and down from 53.1 in August, HCOB data showed. The data was far below a Reuters forecast of 50.6. A reading below 50 indicates contraction territory.
German business activity also contracted in September, with the HCOB flash composite PMI falling from 48.4 in August to 47.2 in September, a seven-month low.
“A technical recession seems to be baked in” to Germany’s gross domestic product (GDP) outlook, according to Cyrus de la Rubia, chief economist at Hamburg Commercial Bank (HCOB).
“Our GDP nowcast for the current quarter, which considers the HCOB PMI among other indicators, now points to a 0.2% decrease compared to the quarter before. In the second quarter GDP already shrank at a rate of 0.1%. There is still some hope that the fourth quarter will be better as higher wages combined with lower inflation should boost not only real income but also consumption, supporting domestic demand.”
Retailer Hugo Boss erased earlier losses after analysts at Bank of America Global Research cut their rating on the stock to “underperform” from “buy,” citing waning Chinese demand denting the wider luxury sector. The company itself warned of challenging market environments in China and the U.K. as it cut its sales outlook in a July trading update.
Shares of Hugo Boss closed 1.5% higher, having tumbled more than 6% earlier in the session.
Elsewhere, shares of British property portal Rightmove traded 0.8% higher after the group reportedly rejected yet another sweetened takeover offer from Australian property listing firm REA Group.
Global markets continue to trade higher following the Federal Reserve’s 50-basis-point cut last week, its first cut in four years. Asia-Pacific markets were mostly higher overnight as investors also digested monetary policy decisions from Japan and China.
U.S. stocks were slightly higher on Monday after excitement over last week’s rate cut propelled the Dow Jones Industrial Average to a record closing level.