European Stocks Rally on Auto Sector Gains Amid Nexperia Optimism

European stocks rose as investors responded to positive earnings reports. Auto shares benefited from the possibility of Nexperia's China plants resuming shipments after government intervention. While European firms lag behind U.S. peers in profit growth, optimism on Sino-U.S. trade relations and central bank actions uplift the market.

European stocks saw an uptick on Monday, buoyed by investor reactions to fresh earnings reports and a promising outlook for the auto sector. The pan-European STOXX 600 index climbed 0.4%, recovering from last week's one-week low.

Auto stocks such as Renault and Mercedes Benz surged over 3.3% based on optimism that Dutch chipmaker Nexperia's Chinese plants might soon resume shipments amid geopolitical tensions. The move follows Dutch government intervention that disrupted Nexperia's supply chain to global automakers.

Despite European companies trailing their U.S. counterparts in profit growth, market sentiment improved due to thawing Sino-U.S. trade tensions and upcoming central bank rate decisions in Norway, Sweden, and the UK, contributing to October's fourth-straight month of gains for the STOXX 600.

(With inputs from agencies.)