STOXX 600 rises on gains in industrials

The pan-European benchmark closed 0.1% higher, with most regional markets closing in the green except Italy's FTSE MIB

Europe's STOXX 600 eked out minor gains on Tuesday led by gains in industrials as investors assessed a flurry of downbeat earnings and kept a close watch on voting in a tightly contested U.S. presidential election.

The pan-European benchmark closed 0.1% higher, with most regional markets closing in the green except Italy's FTSE MIB led by 7.1% drop in shares of Ferrari that witnessed a decline in third-quarter car shipments.

The industrial sector climbed more than 1% after Britain's Melrose Industries got an ugrade on its free cash flow forecast for 2027/28 from Citigroup. The aerospace components supplier gained 4%.

Healthcare shares dipped nearly 2% following a report that dozens of senior executives at AstraZeneca's China unit could be implicated in the biggest insurance fraud case in the country's pharma sector in years.

AstraZeneca's shares reached an eight-month low, declining more than 8% and logged their worst day since March 2020.

The automobiles and parts index slid 1.8% to hit its lowest level since January 2023.

The focus also remained on the close contest between Democrat Kamala Harris and Republican Donald Trump as voting began in the U.S. presidential elections, with the latter as the frontrunner, as per most betting market odds.

A full sweep for Trump is probably good news for U.S. domestic equities, bad news for European and international equities, according to Ben Ritchie, head of developed market equities at abrdn.

If Harris wins, the market reaction will probably be fairly muted, although you may see something of a relief in European and international equities, he added.

Trump's policies on immigration, tax and tariffs are generally viewed as inflationary, which could prompt higher U.S. interest rates.