European stock markets rallied in early action on Monday, as investors welcomed progress in U.S. debt negotiations after congressional leaders expressed optimism a deal can be struck to avert the so-called fiscal cliff.
The Stoxx Europe 600 index rose 0.9% to 265.28, recouping from a 2.7% loss last week.
Among notable movers in the index, shares of Fugro NV tanked 19%, after the firm said Arnold Steenbakker will step down as chairman of the board of management because of difference of opinions.
Shares of Barclays PLC jumped 3.2%, as Goldman Sachs lifted the bank to buy from neutral.
Investor also looked to the U.S., where policy makers were getting closer to reaching an agreement to avoid automatic spending cuts and tax hikes slated to take effect Jan. 1, referred to as the fiscal cliff.
President Barack Obama said over the weekend he is confident “we can get our fiscal situation dealt with,” while House Minority Leader Nancy Pelosi (D., Calif.) said any deal must include tax-rate hikes for the wealthy.
Republicans meanwhile expressed they are willing to consider new revenue, but that they have not endorsed tax hikes on the rich. See: Obama and Pelosi hopeful on budget deal
Concerns that Democrats and Republicans would fail to make a deal in time hampered the investment mood last week, sending Europe’s benchmark index to its lowest level since early August.
On Monday, risk sensitive sectors such as banks and resource firms were among major gainers.
In Germany, shares of Deutsche Bank AG added 3.4%, while those of Commerzbank AG gained 3.5%.
The DAX 30 index traded 1.3% higher at 7,038.83.
Banks were also on the rise in the U.K., with shares of HSBC Holdings PLC up 1.6%.
Shares of oil group BP PLC added 2.4% and Royal Dutch Shell PLC shares picked up 0.6%. Oil prices were higher.
The FTSE 100 index gained 1% to 5,660.23.
Among French stocks, shares of Credit Agricole SA jumped 3.4%, while Société Générale SA rose 2.8%.
The CAC 40 index rallied 1.3% to 3,384.68.
Marketwatch
