FRANKFURT, Oct 9 ― European stock markets gained today on rosy earnings forecasts from retailers Pandora and Zalando as well as drugmaker Novo Nordisk, with investors keeping an eye out for signs of fresh US stimulus.

The STOXX 600 index rose 0.4 per cent, led by miners and oil companies as commodity prices rose.

The European equities benchmark was on course to record its second straight week of gains as a string of mergers and acquisitions as well as a recovery in beaten-down sectors like banks and energy lifted regional markets.

Gains, however, were capped by concerns around rising coronavirus cases across the continent.

“Overall, there is a risk that market sentiment could easily turn sour in the short-term given the uncertainty related to the US election and Brexit as well as rising Covid-19 cases and fears of broader lockdowns,” analysts at Unicredit wrote in a note.

The Spanish government said Madrid, one of Europe's worst virus hotspot, must enforce travel restrictions or it will impose a state of emergency.

France's new daily Covid-19 infections remained above the record 18,000 threshold for the second day, while UK's health minister Matt Hancock warned the country was at a “perilous moment” as more than 17,540 new Covid-19 cases were recorded.

Globally, investors are now closely tracking the political events in the United States ― a presidential election that is less than a month away and signs of progress on new fiscal stimulus.

President Donald Trump yesterday raised hopes that Congress could reach a deal, particularly for battered sectors such as airlines.

Sentiment was supported by upbeat earnings outlook. Danish jewellery maker Pandora jumped 14 per cent and German online fashion company Zalando rose 4.4 per cent after raising their outlook for 2020 on the back of a strong third quarter.

Danish pharma company Novo Nordisk gained 3.3 per cent after it raised its 2020 sales and operating outlook.

Cruise operator Carnival gained 3.7 per cent after it reported a smaller-than-expected quarterly loss and said advanced bookings for next year were improving.

Broadly, companies on the STOXX 600 are expected to post a profit decline of 38 per cent in third quarter and 22.7 per cent in the current quarter, according to Refinitiv data, as businesses recoup from a coronavirus-driven hit.

Euronext slipped 2 per cent after hitting a record high last week. London Stock Exchange accepted a €4.325 billion (Rm21.2 billion) cash offer from the pan-European bourse operator for the Milan stock exchange. ― Reuters