March 16 (Reuters) - Europe's STOXX 600 edged higher on Monday, with Commerzbank shares climbing after UniCredit launched a bid for a 30% stake in the German lender, while defence stocks also gained
European shares snap three-day losing streak as oil prices retreat
Market Overview and Key Drivers
By Avinash P and Niket Nishant
March 16 (Reuters) - European shares rebounded after an early wobble on Monday as oil prices eased, offering some relief to investors stung by the escalating conflict in the Middle East.
The pan-European STOXX 600 index closed 0.45% higher after falling as much as 0.45% earlier in the session. It snapped a three-day losing streak, thanks to gains of 1.48% and 1.2% in real estate and energy shares, respectively.
Oil Prices and Geopolitical Tensions
Investors have been highly sensitive to crude prices, which have soared since the U.S. and Israeli strikes on Iran began more than two weeks ago. But the prices eased on Monday on hopes that more ships would be allowed to pass through the Strait of Hormuz, a vital artery for global oil shipments.
Market Sentiment and Analyst Insights
"The market seems to be counting on a U.S. president who in the past has consistently shown a relatively low tolerance to adverse financial market movements," said Richard de Chazal, macro analyst at William Blair.
"It is hoping he decides to end the conflict sooner... before too much domestic economic damage takes place ahead of the important midterms."
Packed Central Bank Week
Upcoming Policy Decisions
Attention is also shifting to a busy slate of central bank meetings this week, where policymakers will have a chance to outline how recent events are shaping their outlook and give investors fresh clues on how to position.
"Given that the conflict is only two weeks old, policy will be on hold, and therefore the focus will be on updated economic forecasts from the Federal Reserve and from the European Central Bank," said Jeremy Batstone-Carr, European strategist at Raymond James.
Focus on Central Bank Leaders
"More particularly, the market's focus will be on the accompanying statement and the tenor of the press conferences held by (Fed Chair) Jerome Powell and (ECB) President Lagarde and (Bank of England Governor) Andrew Bailey."
Investors have rapidly trimmed rate cut bets on fears that the oil supply shock could boost crude prices and push inflation higher, forcing central banks to delay easing.
Stock Movers and Analyst Actions
Major Gainers and Losers
Among individual stocks, Commerzbank rose 9% after Italy's UniCredit launched a bid to increase its stake in the German lender. UniCredit shares were marginally higher.
Italian hearing aid group Amplifon's shares declined nearly 14% to a nine-year low after it announced plans to buy Denmark's GN Store Nord's hearing business for 2.3 billion euros ($2.6 billion).
Analyst Upgrades
Separately, Goldman Sachs raised its target for Britain's FTSE 100 for the next 12 months to 10,800 points from 10,400 points.
(Reporting by Avinash P in Bengaluru; Editing by Sherry Jacob-Phillips and Leroy Leo)
