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* Markets await big earnings week
* UniCredit falls as MPS sale talks collapse
* Telecom sector down as Bofa bearish on Nokia, Ericsson
(Updates to market close)
By Anisha Sircar and Ambar Warrick
Oct 25 (Reuters) - European stocks closed flat on Monday, as
gains in banks and commodity-linked sectors were offset by
losses in industrial stocks on rising bond yields, and as the
outlook for the telecom sector deteriorated.
The pan-European STOXX 600 closed largely unchanged
at 472.21 points, with concerns over rising inflation and
slowing economic growth also weighing on sentiment.
Mining and energy stocks rose 1.8% and 1.0%,
respectively, boosted by oil prices at multi-year highs and a
rebound in copper prices as a drop in Chinese inventories
fuelled expectations of more buying.
"The market has been worried about the risk of stagflation
for the past few weeks. And every time you get to see oil prices
going up, that's when the market starts to worry that
stagflation risk is coming back," said Andrea Cicione, head of
strategy at TS Lombard.
Rising bond yields, driven by expectations of monetary
policy tightening in the U.S. and Britain, benefited bank stocks
, with the sector rising 0.8% to a more-than two-year
high.
HSBC Holdings gained 1.9% as concerns about
pandemic-related bad loans were replaced by a surprise 74% rise
in the British bank's third-quarter profit and $2 billion
buyback announcement.
But rising yields weighed on industrials and
utilities, as they made future returns from the sectors,
which are largely dividend-linked, appear less attractive.
Planemaker Airbus fell 1.6% on rebuffing calls to
temper plans almost double production of its best-selling A320
jet family.
Telecom stocks sank 0.9% after BofA Global Research
reinstated "underperform" ratings on Nokia and
Ericsson on low earnings expectations, and signs that
the 5G market had peaked.
The STOXX 600 finished at over six-week highs last week,
buoyed by optimism about the earnings season. The focus turns to
major earnings reports this week, as well as a European Central
Bank meeting.
Of the 18% of STOXX 600 companies that have issued
third-quarter reports so far, 63% topped analysts' profit
estimates, as per Refinitiv I/B/E/S data. About 52% beat
estimates in a typical quarter.
UniCredit slipped 1.7% after the Italian
government and the bank ended talks over the sale of ailing
Tuscan bank Monte dei Paschi di Siena (MPS).
Monte dei Paschi di Siena (MPS) slid 2.4%.
Spain's Sabadell rose 2.8% after it said its board
had rejected an offer from Co-operative Bank for its British
subsidiary TSB.
(Reporting by Anisha Sircar in Bengaluru; editing by Uttaresh.V
and Barbara Lewis)
