European shares hit two-week high; inflation data, Fed meeting in focus

The STOXX 600 lost some steam in April after five straight months of gains amid the impact of record-high interest rates, ongoing Middle East tensions and the European Central Bank's policy outlook. Investors await euro zone inflation data on Tuesday and the U.S. Federal Reserve's much-anticipated May interest rate decision on Wednesday, while keeping a track of the ongoing earnings season.

European shares touched a two-week high on Monday, extending last week's strong run, with euro zone economic data and a U.S. policy decision in focus.

The pan-European STOXX 600 was up 0.3%, as of 0837 GMT, after logging its first weekly gain in four on Friday. The STOXX 600 lost some steam in April after five straight months of gains amid the impact of record-high interest rates, ongoing Middle East tensions and the European Central Bank's policy outlook.

Investors await euro zone inflation data on Tuesday and the U.S. Federal Reserve's much-anticipated May interest rate decision on Wednesday, while keeping a track of the ongoing earnings season. "You should start to see the improvement start to roll through the next (earnings) season if rate cuts come through ... there's far more emphasis from an investor's perspective on the outlook," Morningstar European market strategist Michael Field said.

Basic resources were among the top sectoral gainers, up 0.8% at a 13-month high, with Anglo American climbing 1.7% after Reuters reported BHP Group is considering making an improved offer for the miner. Philips surged 33.8% as the Dutch firm announced a sweeping settlement of $1.1 billion for claims over its recalled breathing devices in the United States, that will end the uncertainty that had slashed its market value in the past three years.

With Philips' shares touching a more than two-year high, the healthcare sector rose to an over one-month high. Atos jumped 14.9% as the French government made an offer to buy out some of IT firm's key units.

Deutsche Bank dropped 5% as the German lender will make a legal provision over a litigation regarding its takeover of Postbank that will hurt its second-quarter and full-year profitability. Porsche lost 2.8% following a 30% drop in first-quarter operating profit.

Norway's Public Property Invest, partly owned by indebted Swedish real estate group SBB, lost 7% on its Euronext Oslo market debut. Spain's Prime Minister Pedro Sanchez will finalise a decision in the morning whether he plans to stay on or quit the premiership. The regional benchmark stocks index was down 0.2%.

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