Europe open: Stoxx 600 bounces off 2023 low as stocks rise

(Sharecast News) - European stocks were bouncing back from a 10-month low on Monday morning as investors hunted for bargains in spite of rising geopolitical tensions in the Middle East. The pan-European Stoxx 600 was up 0.6% by 0856 GMT, with gains of 0.4-0.8% across most major markets early on.

The index has lost 4.6% over the past two weeks, falling in seven out of the ten trading sessions, finishing at a low of 429.58 on Friday, its lowest level since early January.

Conflict in Israel escalated over the weekend after government forces made a large-scale ground assault on Gaza, drawing condemnation from neighbouring countries.

"However, the conflict did not appear to have broader spillover effects in the Middle East. Hence, that sliver of 'good news' has seen the demand for safe-haven assets ease after Israel's military action in Gaza took a more cautious approach than initially anticipated," said Stephen Innes, managing partner at SPI Asset Management.

"Nonetheless, there is growing concern about the possibility of financial conditions over-tightening amid heightened risk aversion driven by geopolitical factors. The intersection of these two dynamics could have significant implications for financial markets and global stability."

Closer to home, figures released on Monday revealed that the German economy shrunk less than expected in the third quarter. GDP declined by 0.1% after stalling in the second quarter, surprising economists who had forecast -0.3%. GDP was 0.3% lower than the third quarter of 2022, worse than the 0.2% annual decline in the second quarter but better than the 0.7% contraction expected.

Traders were also awaiting more key economic news, including the Eurozone economic sentiment indicator for October, which is expected to remain unchanged at 93.3. Inflation figures from Germany and Spain are also due.

In London, Airtel Africa was the best performer after the telecoms group reported its total customer base jumped 9.7% to 147.7 million customers in the first half.

HSBC also rose after reporting a pre-tax profit of $7.7bn in the third quarter, more than double the $3.3bn reported the year before. Revenu was up 40% at $16.2bn, helped by the higher interest-rate environment.

Seimens Energy was rising strongly in Frankfurt as the stock attempted to rebound from record lows seen last week after it was reported that it was in discussions with the government over €15bn in guarantees to help realise certain large industrial projects. Talks continued over the weekend, according to a Reuters report.

Electrolux shares were also attempting a recovery after dropping to their lowest since 2012 following worse-than-expected quarterly results from the electrical consumer products manufacturer on Friday.