(Bloomberg) — European stocks advanced as investors braced for another busy week of earnings and geopolitical concerns eased after limited Israeli strikes on Iran. The Stoxx Europe 600 Index rose 0.3% at the London open, led by gains for autos, travel and leisure stocks, while the energy sector was the only one in negative territory as oil fell.
Crude tumbled more than 5% at one point in Monday’s session and gold edged lower after Iran said its oil industry was operating normally following Israel’s attacks on military targets across the country in retaliation for a missile barrage earlier this month. “The limited response from Israel has raised hopes that the conflict will not escalate further,” said Mohit Kumar, chief strategist and economist for Europe at Jefferies. Equities in Europe are set for a small retreat in October as risks including the UK budget and the US presidential election keep traders cautious.
Sectors most exposed to China’s economy, such as luxury stocks and miners, have come under particular pressure as investors assess the outlook for the country’s push to revive its stalling economy. There are positive factors too. Earnings beats have come in above average in both the US and Europe so far, according to Barclays strategists.
“We still have a medium term bullish bias for risky assets, but are taking some profits leading up to the elections,” Kumar says. He added that any pullback in risky assets is a buying opportunity. Markets are also .
