European equities tick higher despite political instability in Germany; autos pop 1.5%

European bourses picked up the pace on Monday afternoon, however gains were somewhat capped as political instability in Germany continued to rattle sentiment. The pan-European Stoxx 600 (^STOXX) rose 0.6 percent higher in afternoon deals, with most sectors moving into the black. All major bourses were trading higher, however the U.K.'s FTSE 100 (FTSE International: .FTSE) was lagging behind the likes of France and Germany. Market sentiment in Europe remained relatively unchanged after the U.S. open, as markets overseas began the day on a relatively flat note.

Autos jumped 1.5 percent as a sector in afternoon deals, with German and French carmakers leading the sector. Volkswagen (XETRA:VOW3-DE) rose over 4.5 percent, after news emerged over the weekend that the manufacturer would invest 22.8 billion euros ($26.9 billion) in its main car brand over the course of 2018 to 2022. Porsche, which is owned by Volkswagen, also popped over 4 percent. Health care stocks were strong performers on Monday following news that President Donald Trump is not going to push for a repeal of Obamacare in a tax bill. The sector was also boosted by news that Roche (Swiss Exchange: ROG-CH) successfully concluded trials against lung cancer. The stock jumped almost 6.5 percent up on the news. Media stocks posted solid gains with German broadcaster ProSiebenSat.1 (XETRA:PSM-DE) leading the pack. Shares of the firm jumped 3.5 percent, after news emerged that the broadcaster's CEO, Thomas Ebeling, would be leaving the company in February. On the other hand, financial services and insurance stocks were moving into the red on growing doubts over U.S. plans to update the tax system. The euro (Exchange:EUR=) was trading lower against the yen, dollar and sterling at about 3:10 p.m. London time (10:10 a.m. ET). The currency was under pressure following news that German Chancellor Angela Merkel failed to reach an agreement with two other political parties to form a new government. The FDP pulled out of the talks citing irreconcilable differences. Merkel is now to consult with the German president on what to do next, but it's possible that new elections could be called. Looking at individual stocks, Altice (:ATCT-NL) jumped over 9 percent before paring some gains on Monday — hitting the top of the European benchmark, after denying market speculation that it was preparing to raise capital. The collapse of the German coalition talks sent the energy group RWE (XETRA:RWE-DE) higher in morning deals. Investors believe that there are fewer chances that the Greens will join the next government and thus its plans to phase out coal power plants will be put on hold. The stock rose around 3.5 percent. Nex Group came off its session lows, yet remained in the red, after announcing a drop in its first-half profits. Elior Group (Euronext Paris: ELIOR-FR), meanwhile, sunk to the bottom of the STOXX 600, off more than 5 percent after Citigroup, Kepler Cheuvreux and Natixis cut their price targets on the stock. In other news, oil prices were under pressure on Monday, with Brent off more than 1 percent, as investors were on edge ahead of an OPEC meeting due next week.

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