By Shashwat Chauhan
(Reuters) -European shares were flat on Monday as losses in technology stocks offset gains in resources-linked shares, while focus remained on the U.S. presidential election.
The pan-European STOXX 600 held steady at 510.89 points, with energy stocks up 0.6% and amongst top gainers as a decision by OPEC+ to delay plans to increase output pushed up oil prices. [O/R]
Basic resources also rose 0.3% on advancing base metal prices following the weakening of the dollar. [MET/L]
Technology stocks were the laggards, down 0.7% with STMicroelectronics, Europe’s largest chipmaker by revenue, shedding 1.6% after Morgan Stanley downgraded the stock to “underweight” from “equal weight”.
All eyes are now on the Nov. 5 U.S. election, with opinion polls too close to call a clear winner between Republican candidate Donald Trump and Democrat Kamala Harris.
“A Trump win will probably bode for further relative underperformance of the European market versus the U.S. market,” said Sebastiano Chiodino, head of liability driven investments at Generali (BIT:GASI) Asset Management.
Trump’s policies on immigration, tax and tariffs are generally viewed as inflationary, which could prompt higher U.S. interest rates.
“On the opposite end, a Harris win will go more in continuity and inevitably some unwinding of the Trump trade which can trigger some catch up of European equity vs the U.S.”
The pan-European benchmark is up close to 7% so far this year compared to a more 20% in the S&P 500.
Another key event this week is the U.S. Federal Reserve’s interest rate decision on Thursday, with markets all but convinced that it will opt for a 25 basis points cut.
The Bank of England is also expected to ease its policy by 25 bps this week, while rate decisions in Norway and Sweden are also awaited.
Meanwhile, fresh data indicated that euro zone manufacturing showed some signs of stabilisation in October, as while activity contracted for a 28th month, it did so at a shallower pace.
Schneider Electric (EPA:SCHN) fell 1% after the French industrials giant said it has ousted CEO Peter Herweck with immediate effect.
Ryanair lost 2.2% after Europe’s largest low-cost airline trimmed its passenger growth target for next year due to Boeing (NYSE:BA) delivery delays.
On the other hand, Volvo (OTC:VLVLY) Cars gained 2.5% after the Swedish automaker’s sales rose 3% year-on-year in October.
UK’s Burberry jumped 4.6% after a report over the weekend said that Italy’s Moncler could be considering making a bid for the luxury firm. Moncler edged 0.1% lower.
