European shares climb on bank gains, focus turns to earnings season

By Reuters News

By Avinash P

Oct 12 (Reuters) - European shares rose on Monday, led by banking stocks as oil prices eased on hopes of Russia-Ukraine energy ceasefire, while investors awaited the start of the earnings season for fresh catalysts.

The pan-European STOXX 600 index .STOXX gained 0.56% to 635.09 points by 0843 GMT.

Spain's bank-heavy IBEX .IBEX jumped 1.1%, the most among regional peers, while the STOXX 600 banking sector .SX7P advanced 1.5%.

Oil prices slipped on expectations of more Russian supplies after US President Donald Trump said Ukraine and Russia had agreed to halt attacks on each other's energy facilities following a US-Russian diesel-supply deal. O/R

Investors now will be eyeing earnings reports from corporate Europe to gauge the health of companies amid geopolitical uncertainty and higher borrowing costs.

David Morrison, senior market analyst at Trade Nation, said third-quarter earnings, especially from semiconductor companies and other AI beneficiaries, would be key in shaping near-term market sentiment.

LVMH LVMH.PA will report results after markets close in Europe. Its shares were marginally higher and the broader sector .STXLUXP also edged higher.

Semiconductor equipment maker ASML ASML.AS and investment firm EQT EQTAB.ST are due to report later this week.

Eurozone bond yields eased on Monday, further helping lift sentiment for riskier assets. GVD/EUR

However, yields remain near multi-year highs, reflecting concerns that interest rates will stay higher for longer.

Traders currently expect the European Central Bank to keep rates on hold at its October meeting, while pricing in a quarter-point rate hike in December, according to LSEG-compiled data.

Still, analysts point to limited scope for further ECB tightening given the euro zone's weak growth backdrop.

"The euro area cannot point to robust economic growth. That's simply not the case," Morrison added.

Automobiles shares .SXAP added 0.8%, on track to extend gains from Friday after China agreed to cut exports of its hybrid and plug-in hybrid vehicles to the EU.

Media stocks .SXMP were the biggest laggards, down 0.6%.

Among other stock moves, Nordex NDXG.DE advanced 2.5% after the onshore wind turbine manufacturer said its project order intake in the third quarter rose 30% year-on-year.

Vallourec VLLP.PA rose 4% after the French steel tube maker won a contract from TotalEnergies < TTEF.PA> for the Absheron gas field in Azerbaijan.

Inwit INWT.MI advanced 3.4% after Reuters reported exclusively that the telecoms towers company's leading shareholders were arranging the financing for a potential take-private deal.

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