European stocks close higher as investors follow Ukraine developments

LONDON — European stocks closed higher on Monday as investors continued monitoring developments in the war between Ukraine and Russia.

The pan-European Stoxx 600 provisionally closed up by 0.3%, with auto shares climbing 1.2% to lead the gains as most sectors and major bourses entered positive territory

Global markets are watching events in Ukraine closely more than a month after Russia began its invasion of the country

Ukrainian President Volodymyr Zelenskyy has reiterated that his country is prepared to discuss adopting a neutral status as part of a peace deal with Russia. Meanwhile, U.S. Secretary of State Antony Blinken has sought to clarify President Joe Biden’s comments that Russian President Vladimir Putin “cannot remain in power

Although European stocks were grinding higher on Monday, Morgan Stanley’s chief European equity strategist, Graham Secker, told CNBC that the best investors could hope for in the near future is for stock valuations to remain flat

“The multiples look OK but they don’t look particularly cheap. They’re basically in line with their very long-run average, and given the very tricky environment that we’re seeing at the moment, coupled with the Fed raising rates, it’s hard to see multiples going up,” Secker said

Morgan Stanley came into 2022 projecting 10% earnings growth for European companies, but the bank recently cut this to just 3% in light of the shifting outlook

“There’s a lot of cost pressures in the systems for companies,” Secker told CNBC’s “Squawk Box Europe” on Monday

“There’s going to be more question marks about whether pricing power will be good enough to allow companies to put their prices up, given some of these building pressures on the consumer from high inflation in general

Looking at individual stocks, shares of Rolls-Royce slumped 10% as speculation about a possible takeover faded. The stock rose as much as 19% late Friday

U.S. stocks struggled for direction Monday as investors took a pause following two straight weeks of gains. Traders are awaiting a series of key economic reports, while also keeping a close eye on the Federal Reserve’s planned interest rate hikes

Key data releases in the U.S. this week include the Job Openings and Labor Turnover Survey, and ADP will also release its private payrolls data ahead of the closely watched monthly jobs report, on Friday

Trade was mixed in Asia-Pacific markets on Monday amid fears over a Covid outbreak in China. Shanghai, China’s biggest city, entered a two-stage lockdown on Monday

The Atlantic Council Global Energy Forum is taking place on Monday and CNBC will be hosting panels with key leaders in the industry, including Bulgaria’s and Albania’s energy ministers, and Claudio Descalzi, the CEO of Eni