Europe close: Stoxx 600 hits two-month high as oil prices drop

2nd Nov 2026 16:10

(Sharecast News) - European stocks rose to their highest in nearly two months on Monday as a sharp drop in oil prices lifted sentiment as investors watched a number of key risk events closely.

The pan-European Stoxx 600 index finished 0.4% higher at 649.65, its highest close since 7 September, with solid gains seen across the continent.

Oil prices were sharply lower on Monday on hopes that renewed diplomatic efforts could yet bring about an end to conflict in the Middle East. As at 1712 GMT, front-month Brent crude was down 7.7% at $104.74 a barrel while West Texas Intermediate was off 7.3% at $96.52.

Traders were reacting to three days of talks between Iranian officials and Qatari mediators, which are aimed at ending the US-Iran war. Tehran also confirmed that talks with America were continuing, with Foreign Ministry spokesperson Esmaeil Baghaei telling Reuters: "I can tell you that the dialogues are continuing. However, the issue is complex."

It was also widely reported that Donald Trump was increasingly minded not to resume attacks on Iran, despite calls for further strikes from Israel's prime minister Binyamin Netanyahu.

"Today is almost the polar opposite of Friday's session. A lack of any military action over the weekend and the chance for traders to reassess the AI trade meant that risk appetite was already back, and then headlines around Iran and potential willingness to negotiate prompted the rally to really get going," said Chris Beauchamp, chief market analyst at IG.

"We have been here before of course, but it shows how ready investors are for some kind of deal that even a single headline can drive such a move."

Also in focus, Apple's quarterly results are due out after the closing bell in New York as the final day of campaigning for the US mid-term elections kicks off. Investors were also eyeing interest rate decisions in Sweden, Norway and the UK this week.

Closer to home, the S&P Global eurozone manufacturing PMI came in at 52.7 on Monday, down marginally on September's record print of 52.9 but ahead of forecasts for a fall to 52.4. It was also the ninth consecutive month of expansion.

In Germany, retail sales dropped 2.3% year-on-year in September, according to figures from the federal statistics office Destatis, underscoring the fragile state of consumer demand in Europe's largest economy. Expectations were for a 1.1% decline, after a 0.4% fall in August.

In corporate news, Alstom plunged around 26% after slashing its full-year profit margin forecast and warning of substantial negative free cash flow amid technical and production difficulties in Germany.

Ryanair advanced after it launched a sweeping review of costs, including possible recruitment and pay freezes, as it seeks to mitigate a €2bn spike in fuel prices.