STOXX 600 finishes lower ahead of key earnings reports

By Paolo Laudani, Ankika Biswas and Johann M Cherian

(Reuters) -European shares ended Monday's choppy session in the red ahead of a series of marquee corporate earnings, although stabilising oil prices buoyed the energy sector.

The continent-wide STOXX 600 slipped 0.6%, with the real estate sector leading with a near 2% drop, while energy stocks led gains as oil prices stabilised after a 7% drop last week. [O/R]

Bourses in top markets Germany, France, Italy and Spain ended down between 0.6% and 1%.

The STOXX index had ended higher last week, on the back of a rise the week before as well, after the European Central Bank cut its interest rate on Thursday.

Lithuanian central bank governor Gediminas Simkus said on Monday the ECB may need to reduce it below the "natural" level if a fall in inflation became entrenched.

Meanwhile, all eyes are on Deutsche Bank, Lloyds and Barclays who will kick off earnings reporting for the heavily weighted financials sector this week.

Russ Mould, investment director at AJ Bell, said markets would keep an eye on loan impairments which had seen a relative increase among U.S. banks.

German software behemoth SAP, which comprises 15% of the country's benchmark DAX index will further set the tone for tech stocks when it reports third-quarter earnings later on Monday.

"Just by way of market cap, (SAP's results) will be pored over with unusual amounts of attention and after ASML's disappointment people, will be looking to another megacap for some reassurance," Mould said.

Lacklustre results from the chip equipment maker had sparked a rout in semiconductor stocks globally last week.

Investors also monitored polls that showed a rising chance of former President Donald Trump winning the Nov. 5 U.S. election, which would be seen as bruising to the European economy. Those odds were reflected in "Trump trades" such as the U.S. dollar and cryptocurrency bitcoin.

Insurance stocks were among the losers on Monday, bogged down by Munich Re's 3% drop after Jefferies cut its rating on the stock to "hold", expecting little upside.

Coffee and tea company JDE Peet's jumped 16.3% to the top of the STOXX 600 after it appointed a new chief executive and confirmed its 2024 outlook.

Forvia climbed 5.2% after the French car part supplier secured new deals with Chinese automakers BYD and Xiaomi.

Sanofi dipped nearly 1%. The French drugmaker said it had entered exclusive talks to sell a 50% controlling stake in its consumer health business Opella to U.S. private equity firm Clayton Dubilier & Rice.

Switzerland's SGS fell 2.3% after RBC cut its rating on the testing and inspection company's stock to "underperform".

(Reporting by Paolo Laudani in Gdansk, Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Savio D'Souza and Alison Williams)