FX.co ★ European Shares Extend Gains On China Optimism

European equities advanced for the eighth consecutive session on Monday, with particular momentum in sectors linked to China, including mining, luxury goods, and automotive industries.

In China, consumer price inflation unexpectedly slowed in November, and the reduction in factory deflation kindled optimism for the introduction of more assertive fiscal and monetary measures in the coming year to bolster domestic demand.

China's Politburo, steered by President Xi Jinping, reaffirmed its commitment to stabilize real estate and stock markets while intensifying "unconventional counter-cyclical" interventions.

Investors remain vigilant about escalating tensions in Syria and are anticipating guidance from an upcoming European Central Bank (ECB) policy meeting and U.S. inflation data later this week. The ECB is anticipated to implement another interest rate cut amid concerns about the fiscal policy paths of Germany and France.

Economic indicators revealed that the Eurozone Sentix Investor Confidence Index fell to -17.5 in December from November's -12.8, according to the latest survey.

In separate developments, a report indicated that U.K. business confidence has plummeted to its lowest point since January 2023.

The pan-European STOXX 600 edged up by 0.1% to 521.20, following a 0.2% increase on Friday. France's CAC 40 gained 0.4% and the U.K.'s FTSE 100 increased by 0.3%, while Germany's DAX experienced a slight decline.

In the mining sector, shares of Anglo American, Antofagasta, and Glencore each increased by roughly 3%. Automakers such as BMW, Mercedes Benz, Volkswagen, and Renault saw rises between 1-2%.

Luxury brands like LVMH, Hermes, and Kering experienced gains of 1-3% in Paris.

Conversely, Domino's Pizza Group in London saw its shares drop nearly 3% following the announcement of a new five-year agreement with franchise partners.

Reckitt Benckiser, a producer of nutrition products, saw a slight decline after issuing an update on its share buyback initiative.

German meal-kit provider HelloFresh fell by 6.2% amid reports of a U.S. investigation regarding alleged child labor.

Meanwhile, Sartorius, a laboratory and pharmaceutical supplier, gained 1% after appointing a new CEO.

CompuGroup Medical surged by 32%, following news that it is in advanced acquisition talks with CVC Capital Partners.

Banco BPM rose by 1.5%, despite its suitor UniCredit slipping 0.8% after Credit Agricole SA increased its stake in Banco BPM. Shares of Credit Agricole themselves rose by 1%.