European stocks rose on Monday as investors bet that a strong earnings season could extend the bull market. The Stoxx Europe 600 index closed 0.6% higher.
Bank shares led the gains, rebounding after falling 8% over the past two weeks, while telecom and technology stocks lagged.
The pan-European benchmark has struggled to return to the record high set in August, weighed down by a bond selloff, rising oil prices and concerns about France's fiscal position.
For investors, the focus is now on whether strong third-quarter results can continue to support the stock market.
"Double-digit earnings growth has so far helped offset the negative impact of rising interest rates," said Vincent Juvyns, chief investment strategist at ING Belgium. "Against this backdrop, the third-quarter earnings season will be very important for judging whether this bull market has further room to rise."
Strategists at Deutsche Bank expect European companies' third-quarter earnings to grow 25% from a year earlier. They told clients last week that the energy sector is expected to be the largest contributor, but earnings growth is likely to be broad-based across multiple sectors.
Major companies due to report earnings this week include semiconductor equipment maker ASML and Sweden's Ericsson.
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