European Shares Edge Higher Amid Economic Data Anticipation

European shares made modest gains on Monday as investors navigated cautiously ahead of crucial economic data from the region. The STOXX 600 index rose 0.2%, despite a broad-based business activity contraction in September. Individual stock movements included a rise for HSBC Holdings and a fall for Commerzbank.

European shares edged higher on Monday, though gains were capped by investor caution ahead of a wave of crucial economic data from the region this week.

The pan-European STOXX 600 index increased by 0.2% to 515.5 points, recovering some ground after its worst day in over a month last Friday. Euro zone business activity unexpectedly contracted in September, with the bloc's PMI sinking to 48.9 from August's 51.

Germany's DAX rose 0.3%, even as the country's business activity contracted at its sharpest pace in seven months, while France's CAC 40 lost 0.3% following a sharp contraction in its services sector. Key British PMI figures for September are still to be unveiled.

Attention is turning to the European Central Bank members' speeches and the Fed's core personal consumption expenditures (PCE) index due on Friday, which is expected to guide future rate cuts. Amidst individual stock movements, HSBC Holdings gained 1.1% after BNP Paribas agreed to purchase its German private banking unit. Meanwhile, Commerzbank shares fell 4.4% as the German government retains its stake, complicating potential mergers. The banking sector saw a 1.1% decline overall, with AstraZeneca also dropping 1% due to underwhelming trial results for its breast cancer drug.

(With inputs from agencies.)