EUROPE MARKETS: European Stocks Close At 5-month High As October Ends With 1.9% Gain

By Carla Mozee and Sara Sjolin, MarketWatch Features Dow Jones Newswires

Spanish stocks end with 1.4% monthly even after Catalan turmoil

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Europe's benchmark stock index scored a more-than-five-month closing high on Tuesday, capping off October with a monthly gain as traders welcomed earnings reports from the likes of airline Ryanair Holdings PLC and oil major BP PLC.

What stock indexes were doing: The Stoxx Europe 600 index picked up 0.3% to end at 395.22, to close at its highest level since mid-May.

For October, the regional benchmark logged a 1.8% rise, marking its second monthly gain in row.

In Paris, the CAC 40 edged up 0.2% to 5,503.29, and in London, the FTSE 100 rose 0.1% to 7,493.08 (http://www.marketwatch.com/story/ftse-100-advances-as-bp-shares-rally-to-3-year-high-2017-10-31). Those indexes gained 3.3% and 1.6%, respectively, in October.

In Madrid, the IBEX 35 jumped 0.7% on Tuesday to 10,523.50 as the fears over a potential Catalonia secession eased after Madrid imposed direct rule over the region. Despite the lingering fears over a Spanish breakup through October, the benchmark managed to rise 1.4% for the month.

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Trading was closed in Germany for the Reformation Day holiday. The DAX 30 index on Monday ended at a record high of 13,229.57. The German benchmark ended the month with a 3.1% gain.

What drove the markets: Earnings were once again in the drivers' seat, while a trio of economic data for the eurozone also was in focus (http://www.marketwatch.com/story/eurozone-economy-slows-as-inflation-slips-to-14-2017-10-31).

The flash estimate for inflation in the currency union showed consumer prices rose 1.4% in October, down from 1.5% in September, falling further below the European Central Bank's target of close to, but below 2%.

Gross domestic product growth of 0.6% for the third quarter was above expectations, while the unemployment rate for September dropped to 8.9%. That was the lowest joblessness rate since 2009.

Stock movers: Ryanair Holdings PLC climbed 6.9% as the budget carrier stuck with its full-year earnings target (http://www.marketwatch.com/story/ryanair-earnings-fall-sticks-with-guidance-2017-10-31) even as quarterly net profit was dented by compensation costs for passengers. Ryanair in September and October canceled thousands of flights because of problems scheduling staff.

BP shares (BP.LN)(BP.LN) gained 1.7% to close at their highest since January 2017 as the oil producer said it would restart its share buyback program, supported by strong cash generation so far this year. BP's third-quarter underlying replacement cost profit was $1.87 billion, above consensus expectations of $1.58 billion (http://www.marketwatch.com/story/bp-to-restart-share-buybacks-after-production-rise-2017-10-31), according to Reuters.

Weir Group PLC (WEIR.LN) shares dropped 6.8% as the engineering company warned that operating profit for the year would be lower than previously indicated (http://www.marketwatch.com/story/weir-warns-on-profit-even-as-orders-rise-2017-10-31).

BNP Paribas SA (BNP.FR) fell 2.7% as the French lender's quarterly revenue slipped (http://www.marketwatch.com/story/bnp-paribas-profit-rises-on-sbi-life-stake-sale-2017-10-31) to EUR10.39 billion from EUR10.59 billion a year ago. Profit, however, rose and was lifted by a capital gain from the sale of a 4% stake in its Indian joint venture SBI Life.

Croda International PLC (CRDA.LN) shares leapt 4.2% as the specialty chemicals maker backed its full-year guidance (http://www.marketwatch.com/story/croda-saes-rise-backs-full-year-guidance-2017-10-31) and said third-quarter sales rose 6% to GBP334.6 million ($440.8 million).

Outside of earnings, Burberry Group PLC (BRBY.LN) (BRBY.LN) fell 1%, swinging lower after the luxury goods maker said President and COO Christopher Bailey will leave at the end of 2018.

What strategists are saying: "Eurozone inflation took a surprise tumble this morning, with the core CPI reading falling to the joint lowest reading in seven-months. Coming the week after markets took onboard a perceived dovish stance from the ECB, today's tumbling inflation reading proves that it may be wrong to write off eurozone QE quite yet," said IG market analyst Joshua Mahony in a note.

"Interestingly, the eurozone growth story remains on track, with GDP reaching the highest level in a decade, with unemployment falling below 9% for the first time since 2009."

(END) Dow Jones Newswires

October 31, 2017 12:58 ET (16:58 GMT)