FRANKFURT: A rally in heavyweight banks and technology stocks lifted European shares on Monday, while oil prices slumped for the fourth consecutive session, boosting broader risk sentiment.
The pan-European STOXX 600 closed 1 percent higher, marking its biggest one-day jump since July 2. Most regional bourses also ended higher.
The move marks an upbeat start to the week, with investors assessing whether the pull-back in crude can ease inflation pressures.
The European Central Bank raised interest rates earlier this month to combat inflation, as heavy reliance on fuel imports leaves regional economies exposed to swings in oil prices.
“Despite persistent headwinds and above-target inflation, economic growth should pick up in the second half of the year, with the outlook in Europe stronger than consensus expectations,” wrote Christian Schulz, chief economist at Allianz Global Investors.
Bank stocks were among the biggest gainers, up 1.7 percent. Societe Generale gained 1.7 percent and Banco BPM was up 4.3 percent, with the latter rising after media speculation about UniCredit and Credit Agricole reportedly assessing a joint move on the Italian lender.
Technology stocks advanced 1.7 percent, as renewed appetite for AI lifted chip-linked stocks such as Soitec and Aixtron.
However, energy stocks slipped 0.8 percent as Brent crude futures headed for their longest streak of daily losses since June, after reports suggested more-than-expected supply was leaving the Gulf despite the ongoing Iran conflict.
“The move remains cautious rather than decisively risk-on. The main support is coming from lower oil prices and continuing strength in technology, helping offset concerns surrounding the latest Middle East escalation,” said Naeem Aslam, chief investment officer at Zaye Capital Markets.
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