By Shreyashi Sanyal and Ankika Biswas
(Reuters) – European stocks closed at their highest in more than seven weeks on Monday, as a jump in travel and technology stocks helped offset weakness in luxury giants exposed to China.
The pan-European STOXX 600 index closed up 0.33% at 418.34 points, extending its gains after posting a third consecutive weekly high last week.
Earnings for Flutter Entertainment Plc and Ryanair, up 4.2% and 3.8% respectively, pushed European travel and leisure stocks to their highest level in nearly three months. The sector index closed up 1.6%.
Investors’ focus is on Tuesday’s US midterm elections, which will determine Congressional control. Republicans have gained momentum in the polls and betting markets, and analysts expect a divided government to form – with Republicans expected to win the House of Representatives and possibly the Senate.
“If sentiment is positive for the US, that tends to lift European equities as well,” said Giles Coghlan, chief market analyst at HYCM.
Meanwhile, European luxury stocks, including LVMH, Pernod Ricard and Hermès International, were down between 0.7% and 1.5%.
In recent days there have been mixed signals about China’s reopening. While the country’s health authorities reiterated their commitment to strict Covid-19 measures over the weekend, Chinese leaders are considering a reopening after nearly three years of tough pandemic restrictions, with no set timetable.
“If we get positive news from China on Covid and the Republicans win both the Senate and the House of Representatives (in the US), I would see that as positive for European equities,” added Coghlan.
In LONDON, the Financial Times index fell 0.48% to 7,299.99 points.
In FRANKFURT, the DAX index rose 0.55% to 13,533.52 points.
In PARIS, the CAC-40 index lost 0.00% to 6,416.61 points.
In MILAN, the Ftse/Mib index appreciated by 0.90%, at 23,493.00 points.
In MADRID, the Ibex-35 index registered a rise of 0.25%, to 7,962.30 points.
In LISBON, the PSI20 index rose by 0.53% to 5,765.47 points.
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