European equities advanced as a sharp drop in oil prices boosted economically sensitive shares, while French train maker Alstom tumbled after issuing a profit warning.
The Stoxx Europe 600 Index closed 0.4% higher, reversing an intraday decline of as much as 0.3%. Travel, construction and mining stocks outperformed, while health care and energy sectors lagged.
Brent crude extended its losses to more than 7% after Iran's supreme leader approved the government to proceed with negotiations with the US. Oil had already been falling following reports that US President Donald Trump told Israeli Prime Minister Benjamin Netanyahu he wanted the talks with Iran to continue.
Among oil producers, Shell Plc fell 2.9% and BP Plc dropped 4.4%.
French train manufacturer Alstom SA plunged 26%, making it one of the day's worst performers, after the company cut its full-year guidance and announced business adjustments.
Meanwhile, Ryanair Holdings Plc rose 5.2% after its profit beat expectations.
Europe's benchmark index outperformed US stocks last week as investors sought refuge from a selloff triggered by earnings from large US technology companies. Defensive sectors such as health care performed best.
"We don't think the relative strength of European equities can last very long," said Simon Wiersma, chief investment strategist at ING Bank NV. "If you want to look for stronger earnings growth and relatively more attractive valuations, you need to look across the Atlantic and at emerging markets."
Comments