By Pranav Kashyap
(Reuters) - European shares started the week strong, lifted by global oil gains amid Middle East conflict fears and a slew of upbeat earnings, though a drop in Reckitt tempered the rally.
The pan-European STOXX 600 index edged up 0.3%, as of 0832 GMT on Monday, after the benchmark posted marginal gains last week.
Oil and gas stocks were on top, gaining 1.4%, as crude prices inched higher following a rocket strike in the Israeli-occupied Golan Heights. [O/R]
Meanwhile, investors braced for a bustling week, with attention shifting to the U.S. as four of the 'Magnificent 7' companies report, poised to significantly influence market sentiment.
The U.S. Federal Reserve's policy meeting is on Wednesday where traders are wagering the central bank will lay the groundwork for a September rate cut.
"This week could very well end up setting the tone for the rest of the summer because we're going to learn how central banks are thinking about the trade offs they're facing," said Arun Sai, senior multi-asset strategist at Pictet Asset Management.
Investors were on guard as a global tech selloff was sparked last week when results from Tesla (NASDAQ:TSLA) and Alphabet (NASDAQ:GOOGL) failed to impress markets.
"If we went into this earnings season expecting the same kind of beats that we had the last three or four quarters - we are in for some disappointment. We got a little bit of that last week and we're not out of the woods yet," Sai said.
Among individual stocks, Philips soared 10.3% after the Dutch medical devices maker reported an estimate-beating quarterly result, boosted by higher earnings and the implementation of its restructuring programme.
Shares of Germany's Merck were up 3.3% after the company raised its forecast for the group, mainly driven by a strong operating performance at its healthcare and electronics units.
Keeping gains in check, Reckitt Benckiser slumped 9% as close to multiple lawsuits have been filed in the U.S. against the Enfamil formula maker and Abbott Laboratories (NYSE:ABT).
A jury on Friday found that Abbott's specialized formula for premature infants caused an Illinois girl to develop a dangerous bowel disease, ordering the healthcare company to pay $495 million in damages.
Heineken lost 7% after the Dutch brewer missed estimates for half-year operating profit growth, even as it raised its full-year profit outlook. Peer Carlsberg (CSE:CARLa) lost 4%.