European equities inch higher on rate cut hopes

European shares edged higher on Monday as investors remained upbeat about rate cut prospects from the U.S. Federal Reserve and the European Central Bank, while Dassault Aviation shares weighed on the index following a rating downgrade. The pan-European STOXX 600 edged up 0.2% by 0816 GMT, extending gains for a second session.

European shares edged higher on Monday as investors remained upbeat about rate cut prospects from the U.S. Federal Reserve and the European Central Bank, while Dassault Aviation shares weighed on the index following a rating downgrade.

The pan-European STOXX 600 edged up 0.2% by 0816 GMT, extending gains for a second session. Eurozone banks added 0.3%, with shares of Commerzbank up 2.3% after talks of a merger with Deutsche Bank resurfaced, according to a source familiar with the matter.

Dassault Aviation fell 6.2% after Deutsche Bank downgraded the Rafale fighter jet maker to "hold" from "buy". Atos slid 15.1% after the French technology company warned its free cash flow would be slightly below its target in the second half of the year. The firm also named Paul Saleh as its new chief executive officer.

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