European stocks rise; strong gains in Asia boost sentiment

Published 20/10/2025, 08:16
© Reuters

Investing.com - European stocks rose Monday, starting the new week on a positive note, boosted by gains in Asia and ahead of the release of a barrage of corporate earnings.

At 03:10 ET (07:10 GMT), the DAX index in Germany surged 1%, the CAC 40 in France gained 0.5% and the FTSE 100 in the U.K. rose 0.4%. 

The major European indices closed sharply lower on Friday as concerns over the U.S. banking sector hit sentiment. However, shares of U.S. regional banks rebounded on Friday, helping investors shrug off credit concerns.

Nikkei surges on political news 

European stocks have received a boost Monday from sharp gains in Japan overnight, with the benchmark Nikkei 225 surging over 3% to a record high of over 49,000 points. 

Local media reports said that Japan’s ruling Liberal Democratic Party had secured enough backing from its allies to form a coalition government with Sanae Takaichi as prime minister. 

Takaichi is viewed as a fiscal dove, and is broadly expected to increase government spending and oppose more interest rate hikes by the Bank of Japan. 

A parliamentary vote on Takaichi’s premiership is expected to take place on Tuesday, with the LDP leader set to become Japan’s first female prime minister. 

China’s economy grew in Q3 

Staying in Asia, China’s economy grew slightly more than expected in the third quarter of 2025, but at its slowest pace in a year amid persistent headwinds from rampant disinflation and U.S. trade tensions. 

Gross domestic product grew 4.8% year-on-year in the three months to Sept. 30, government data showed on Monday. The print was slightly above expectations of 4.7% but slowed from the 5.2% rise seen in the prior quarter.

Year-on-year GDP growth was also at its slowest since the third quarter of 2024. 

Back in Europe, German producer prices fell 0.1% on the month in September, an annual drop of 1.7%, suggesting that underlying price pressures remain extremely limited in the eurozone’s largest economy.

Luxury sector in focus

In corporate news, Kering (EPA:PRTP) will be in the spotlight Monday after the luxury giant announced over the weekend that it will sell its beauty business to L’Oreal (EPA:OREP) for €4 billion ($4.66 billion), as it seeks to trim debt and return focus to its core fashion business under new CEO Luca de Meo. 

It’s a relatively quiet start to the week for corporate earnings in Europe, but there are more numbers to digest as it progresses, with L’Oreal reporting Tuesday and SAP (ETR:SAPG), Barclays (LON:BARC) and Heineken (AS:HEIN) among the companies reporting on Wednesday. 

Thursday sees the likes of Kering , Roche (SIX:ROG), Unilever (LON:ULVR) and Lloyds Banking Group (LON:LLOY) reporting earnings.

On Wall Street, companies reporting earnings this week include Tesla (NASDAQ:TSLA), Ford (NYSE:F), General Motors (NYSE:GM), Netflix (NASDAQ:NFLX), Procter & Gamble (NYSE:PG) and Coca-Cola (NYSE:KO), along with aerospace and defence giant RTX (NYSE:RTX) and tech stalwarts IBM (NYSE:IBM) and Intel (NASDAQ:INTC).

Crude dips on Ukraine peace talks

Oil prices fell Monday, adding to recent losses as escalating U.S.-China trade tensions added to persistent concerns over sluggish demand and a looming supply glut. 

Brent futures dropped 0.8% to $60.83 a barrel, and U.S. West Texas Intermediate crude futures fell 0.8% to $56.72 a barrel.

Both benchmarks declined more than 2% last week, marking their third consecutive weekly decline, partly due to the International Energy Agency’s outlook for a growing supply glut in 2026.

 

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