European Markets Soar with Optimism Despite Cautious Stimulus Hopes

European stocks reached a two-week high amid anticipation for corporate earnings and the ECB's policy decision. While sectors like tech and utilities rose, caution lingered due to China's lackluster stimulus plans. In other developments, French luxury stocks dropped, and notable joint ventures boosted some defense stocks.

European stocks closed Monday at a two-week high, propelled by optimism over upcoming corporate earnings and an anticipated European Central Bank (ECB) policy decision. The continent-wide STOXX 600 index inched up 0.48%, driven by gains in technology, defense, and utility sectors, each rising over 1.2%.

However, a note of caution emerged following China's less impressive stimulus announcements over the weekend. France's main market underperformed after Fitch downgraded its outlook from 'stable' to 'negative' recently.

As the ECB plans another potential interest rate cut, the economic landscape remains volatile, with German economic indicators pointing to sustained weakness. Meanwhile, movements in the defense and financial sectors, alongside the looming earnings reports, kept investors attentive.

(With inputs from agencies.)