London:European stocks experienced a rise on Monday, supported by a drop in oil prices driven by diplomatic efforts to resolve the conflict in Iran. This development resulted in a boost for airline shares, while energy producers faced pressure.
According to Anadolu Agency – English, the pan-European Stoxx 600 index increased by 2.69 points, or 0.42%, reaching 649.44, nearing a two-month high. Spain's IBEX 35 led the gains among major European markets, climbing 1.63% to 18,957.80. Meanwhile, France's CAC 40 advanced by 0.98% to 8,047.69, Italy's FTSE MIB gained 0.90% to 49,947.94, Germany's DAX rose by 0.63% to 25,981.09, and the UK's FTSE 100 added 0.29% to 10,761.33.
Brent crude oil prices fell by more than 7% after Iranian and Qatari officials engaged in talks for a third consecutive day. This decline partially reversed an October rally that had previously pushed Brent to its highest level in six months, amid concerns over potential escalation following the US midterm elections. The decrease in crude prices led to an approximately 3% rise in travel and leisure shares, marking their largest daily increase since June, as expectations for lower airline fuel costs grew. In contrast, energy shares fell by 2.3%.
Irish low-cost airline Ryanair saw a 5.2% increase despite reporting a 15% year-on-year decline in first-half profit after tax, amounting to £2.15 billion ($2.4 billion). The airline attributed the drop to a doubling in jet fuel prices outside its hedging contracts. Ryanair's average fares decreased by 4%, even as passenger numbers rose by 6% to 125.8 million.
In other news, French train manufacturer Alstom's shares plunged by 26% after the company lowered its full-year forecasts, citing technical issues and additional testing requirements for its Coradia Max trains in Germany. Alstom now anticipates organic sales growth of 2% to 4%, down from the previous forecast of about 5%, and also predicts negative free cash flow for the year.
Separately, S&P Global reported a slight slowdown in eurozone manufacturing growth, with the purchasing managers' index edging down to 52.7 in October from 52.9 in September. Despite this, the index remained above the 50-point threshold that indicates expansion. New export orders rose at their fastest pace in over four and a half years, although higher energy costs and supply disruptions drove input cost inflation to a five-month high. Out of the eight eurozone economies surveyed, only France and Italy recorded a contraction in manufacturing activity.