European stocks rise to 4-month high
European shares advanced to a four-month high on Monday, led by gains in auto and pharmaceutical stock, after the EU cinched a trade deal with the US, avoiding a wider trade war ahead of the August 1 deadline.
The pan-European STOXX 600 index rose 0.8 percent by 0715 GMT. Most regional bourses were also in the green, with UK’s FTSE 100 adding 0.3 percent, Germany’s blue-chip DAX rising 0.7 percent and France’s CAC 40 gaining 1.1 percent.
The trade agreement imposes a 15 percent tariff on most EU goods and requires the EU to invest around $600 billion in the U.S., with tariff rates on spirits still under negotiation.
Automobile stocks were boosted on the day with Porsche and Volkswagen gaining 1.6 percent and 1.9 percent, respectively.
Mercedes-Benz, Stellantis and Volvo Cars, which have pulled their 2025 financial guidance due to U.S. trade uncertainty, rose between 1.6 percent and 3 percent.
China shares cool after 5-week rally
China stocks pulled back from a five-week rally on Monday, as investors looked beyond Beijing’s efforts to curb competition and overcapacity, instead focussing on U.S. trade talk progress, while Hong Kong stocks rose, driven by insurers’ rally.
At the midday break, the Shanghai Composite index fell 0.2 percent to 3,587.69 points after climbing for five straight weeks to a 3-1/2-year high. China’s blue-chip CSI300 index shed 0.2 percent.
Commodity-related companies pared last week’s rally spurred by Beijing’s “anti-involution” campaign, with indexes tracking steel and coal sectors losing 1.7 percent and 2.9 percent, respectively, to weigh on the markets.
Beijing launched an “anti-involution” campaign this month to tackle “disorderly price competition,” or overcapacity, amid persistent deflationary pressure at home and trade curbs abroad.
Insurers added 2.4 percent to rank among the best performers after the industry body cut the reference rate for life insurance products.
Japan’s Nikkei declines
Japan’s Nikkei share average erased early gains to trade lower on Monday, as investors locked in profits following a recent rally and shifted their focus to upcoming corporate earnings.
As of 0217 GMT, the Nikkei was down 0.8 percent at 41,115.60, after rising as much as 0.2 percent earlier in the session.
The broader Topix slipped 0.45 percent at 2,938.55.
“Investors sold stocks to book profits from a recent rally; that’s a short answer to today’s declines,” said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.
“But they sold stocks because the shares jumped last week, and were concerned that corporate earnings may not justify the current level of the equities.”
The Nikkei climbed to a one-year high last week after Japan and the United States struck a deal to lower the hefty tariffs U.S. President Donald Trump threatened to impose on goods from Japan.
Chip-related shares led the declines, with Advantest slipping 7.66 percent to become the biggest drag for the Nikkei.
Banks boost Aussie stocks higher
Australian shares rose on Monday, led by gains in financial stocks, while investors braced for the start of the local corporate earnings season this week.
The S&P/ASX 200 index rose 0.4 percent to 8,703.7 points by 0049 GMT, putting it less than 100 points below the lifetime high of 8,776.4 hit in mid June. The benchmark had dipped 0.5 percent on Friday.
The earnings season begins this week, with mining major Rio Tinto set to lead the way when it reports its half-year results on July 30.
Meanwhile, investors are awaiting the local inflation print, also due on Wednesday, for clues on the Reserve Bank of Australia’s (RBA) path for interest rate cuts.
On the local bourse, financials rose 0.5 percent, with the country’s “Big Four” banks gaining between 0.2 percent and 0.7 percent.
India’s equity benchmarks set to open near 1-month low
India’s equity benchmarks are likely to open on Monday near the previous session’s one-month closing low, with uncertainty over trade talks with the U.S. and weaker-than-expected results from Kotak Mahindra Bank weighing on sentiment.
The Gift Nifty futures were trading at 24,841 points as of 8:04 a.m. IST, indicating that the Nifty 50 will open near Friday’s close of 24,837.
The benchmark hit its lowest level since June 20 at 24,806.35 points in the previous session.
Gulf shares firm as markets brace for pivotal week
Most Gulf equities ended higher on Sunday as investors anticipated a critical week ahead, focusing on key corporate earnings and the US Federal Reserve’s policy meeting, while President Donald Trump’s August 1 trade deadline loomed.
Gains were tempered by oil prices slipping to a three-week low, pressuring sentiment in a region where oil remains a key economic driver.
Saudi Arabia’s benchmark index added 0.1 percent, helped by a 4 percent jump in healthcare provider Dr Sulaiman Al Habib and a 2.2 percent increase in SABIC Agri-Nutrients Co after the duo reported a rise in second-quarter profit.
Elsewhere, Yanbu National Petrochemical Co gained 2.9 percent after the firm reported a more than two-fold sequential increase in second-quarter profit.
Wall street’s main indexes rise
Wall Street’s main indexes were higher on Friday after EU officials signalled that a framework trade deal with the US could be signed as soon as this weekend, while Intel tumbled following a disappointing forecast.
At 11:36 a.m. the Dow Jones Industrial Average rose 71.91 points, or 0.15 percent, to 44,762.88, creeping up to the record high it had touched on December 4. The S&P 500 gained 15.65 points, or 0.24 percent, to 6,378.89, and the Nasdaq Composite gained 51.29 points, or 0.25 percent, to 21,110.19.
Intel dropped 9 percent after the chipmaker forecast steeper third-quarter losses than expected and announced plans to slash jobs.
Deckers Outdoor soared 18 percent after beating first-quarter revenue and profit estimates on resilient demand for its sneakers and boots in international markets.