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Eurofins Scientific drops after Muddy Waters says short on

co

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Germany's Hochtief tops STOXX on Jefferies upgrade

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STOXX 600 up 0.4%

(Updated at 0838 GMT)

By Shashwat Chauhan and Jesus Calero

June 24 (Reuters) - European shares advanced on Monday,

shrugging off initial losses as automobile and bank stocks rose,

while focus remained on the first round of French parliamentary

elections later this week.

The pan-European STOXX 600 rose 0.4% as of 0838

GMT. Autos led gains with a 1.6% increase as the

European Union and China agreed to hold talks on the planned

imposition of tariffs on Chinese-made electric vehicles (EVs).

Euro zone banks added 0.9% with Italian lenders such

as BPER, UniCredit and Monte dei Paschi di

Siena gaining between 2.4% and 3.7%.

The focus will be on the first round of France's

parliamentary elections this week, with polls showing a lead for

the far-right National Rally (RN) party and its allies.

The French benchmark began the week 0.5% up.

Investors awaited commentary from at least four members of

the European Central Bank (ECB) later in the day, including

board member Isabel Schnabel, for clues on the central bank's

monetary policy path.

On the data front, German business morale unexpectedly fell

in June due to more pessimistic expectations of Europe's largest

economy, according to a survey.

"The optimism at the start of the year has given way to

realism. The (latest) readings have illustrated that the German

economy is still struggling to gain more momentum," said Carsten

Brzeski, global head of macro at ING.

Last week, data for June showed the upturn in German

business activity over the past two months slowed, while a

broader euro zone reading showed business growth slowed sharply.

European shares had recouped some losses last week,

following the French election shock-induced drop earlier this

month. However, a fizzling rally in technology stocks had kept

gains in check.

Among other stocks, Hochtief advanced 8.7% as

Jefferies upgraded the German construction firm to "buy" from

"hold", citing the company's growing exposure to high-tech

infrastructure projects.

Belgian pharmaceutical company argenx jumped 7.1%

after it said the U.S. FDA approved Vyvgart Hytrulo, a treatment

for chronic inflammatory demyelinating polyneuropathy.

UK's Prudential added 6.3% after the insurance group

launched a $2 billion share buyback programme

On the flip side, Eurofins Scientific dropped as

much as 19% after short seller Muddy Waters said it is short on

the French testing company.

Germany's Zalando dropped 6.3% after Morgan

Stanley cut the online retailer to "equal weight" from

"overweight".