UPDATE 1-European shares edge higher, Deutsche Bank rally lifts banks

European shares reversed course from early losses to trade marginally higher on Monday, boosted by German lender Deutsche Bank's major overhaul and on positive developments in the U.S.-China trade talks. The pan-European STOXX 600 index was up 0.1% by 0823 GMT, with moves in the region's major country indices being muted as hopes of a 50 basis point interest-rate cut this month by the U.S. Federal Reserve were tempered by strong U.S. jobs data on Friday.

The benchmark had closed lower on Friday, trimming weekly gains. Much of the global stocks rally since June has been spurred by expectations of accommodative monetary policy by major central banks to tackle slowing growth as the damaging trade war between the United States and China takes its toll. Meanwhile, Deutsche Bank shares rose as much as 4.4% to their highest since early May and lifted bank shares.

The German bank eliminated whole teams at its Asian operations, starting to axe 18,000 jobs globally in one of the biggest overhauls at an investment bank since the aftermath of the financial crisis. "18,000 is a lot. I guess investors are impressed with how radical the company is being with its restructuring," said Connor Campbell, an analyst at Spreadex in London.

The move comes after Chief Executive Officer Christian Sewing flagged the restructuring in May, seeking to convince shareholders that he can turn around Germany's biggest lender after its shares hit a record low. On the U.S.-China trade front, White House economic adviser Larry Kudlow confirmed that top representatives from Washington and Beijing will meet in the coming week for trade talks, keeping alive hopes that the two countries can hammer out a trade deal.

Trade-sensitive auto stocks rose 0.8%. Oil and basic material majors on the benchmark index also rose, thanks to higher crude and iron ore prices. However, defensive plays such as utilities and healthcare weighed on the benchmark.

Spanish gas companies Enagas and Naturgy extended losses after Spain's competition regulator proposed on Friday to cut fixed rates of return on the transport and distribution of gas and electricity.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)