European shares close higher amid gains in financials

The pan-European STOXX 600 closed up 0.2% at 609.83 points

European shares closed higher on Monday, underpinned by gains in financials in the run-up to earnings from big banks later this week.

The pan-European STOXX 600 traded choppily for most of the session and closed up 0.2% at 609.83 points – its highest in over a week. Banks led gains among sectors with a 1% gain each.

Earnings from several major lenders such as Germany’s Deutsche Bank and Britain’s Lloyds are due later this week and earnings from financials overall are expected to increase 4%, according to data compiled by LSEG on Thursday.

The tech sector will also be scrutinised for signs of AI monetisation later in the week.

Risk assets tend to make headway early in a new year, but that can experience a reassessment once the data and the corporate earnings start to come through. That’s probably the key vulnerability right now, said Jeremy Batstone-Carr, European strategist at Raymond James.

Traders were still recovering from last week’s bout of U.S.-EU trade uncertainty sparked by a dispute over Greenland

Prices of safe-haven gold and silver surged, sending mining stocks up 1.6% to the index’s highest since June 2008.

Among Monday’s earnings, Ryanair shed 2.3% after reporting third-quarter results. French food and beverage maker Danone slid 2.3%, having hit its lowest in a year on recalling specific baby formula batches in certain markets.

Airbus dropped 2.1%.

Also limiting gains was a 1.6% decline in defence shares.

On the other hand, sportswear maker Puma rose 16.9%, recovering from Friday’s 14% decline.

On policy, U.S. central bank’s interest rate decision later this week will also be in focus. The country’s central bank is expected to leave borrowing costs unchanged, but concerns about its independence are likely to be centre stage.