Europe close: Banks pace rally in stocks
European stocks rallied on Monday, recovering from the big losses seen during the previous week as upbeat corporate news and positive data from China boosted sentiment, particularly towards lenders' shares.
"A fourth week of falls for US equities last week was, it seems, the moment for investors to turn more bullish on global stock markets – losing streaks of this length or longer are rate outside of full-blown bear markets, and if nothing else, buying in after a healthy correction is better than trying to chase a market that had rallied in a straight line for the previous three months," said IG chief market analyst Chris Beauchamp.
The Stoxx 600 was up 2.22% at 363.39, with Germany’s DAX climbing 3.22% alongside to 12,870.87, while the Italian FTSE Mibtel added 2.47% to 19,160.1.
Significantly, the pound was 0.83% higher against the US dollar at 1.2853 ahead of the resumption of Brexit talks and on hopes of a trade deal.
Overnight, official data showed profits at China’s industrial firms grew in August for the fourth month in a row, lifted by a rebound in commodity prices and equipment manufacturing.
Total profits at industrial businesses above a certain size rose 19.1% to 612.81bn yuan (£70bn) from a year earlier, China's statistics bureau said. Growth was broadly in line with the 19.6% increase in July and was the fourth-straight month of recovery from the closure of the economy during the coronavirus crisis.
In corporate news, shares in HSBC rebounded almost 9% after China’s Ping An Insurance lifted its stake in the lender's stock to 8% from 7.95%. The bank last week saw its stock fall to its lowest level since 1995 on the back of report on alleged money laundering activities at major global banks.
Spain's Santander jumped 7% following a Bloomberg report of 'bullish' bets on the stock through options trading on the part of its chairman, Ana Patricia Botin.
Not surprisingly, it was banks that fared best at the pan-European level, with the Stoxx 600's sector gauge up 5.63%.
UK property shares were in focus, with Great Portland Estates climbing 10% on the back of news private equity firm KKR bought a 5.35% stake in the landlord for around £74m. This boosted the sector, with Land Securities, British Land and Hammerson all up on the news.
Shares in Sonova, the world's biggest hearing aid maker, jumped 14% after the company lifted guidance and forecast a return to growth in the second half of the next fiscal year as business activities picked up faster than anticipated, supported by the ongoing recovery of the global market from the impact of the Covid-19 pandemic.
William Hill fell 12% to 272.5p as Caesars Entertainment on Monday confirmed it was in advanced talks with the UK bookmaker on a 272p-a-share offer, valuing the company at £2.9bn.
Shares in William Hill soared on Friday when it revealed Caesars Entertainment and private equity group Apollo each were talking about placing separate bids.
ArcelorMittal shares vaulted 11% higher after America's Cleveland-Cliffs agreed to buy its US assets for about $1.4bn.
Diageo rallied 6% after saying it made a good start to the current financial year as the drinks company's US business beat expectations. The maker of Johnny Walker whisky and Guinness beer said its outlook had improved since the end of June. Sales improved compared to the second half of last year but sales and margins will be lower than in the first half of last year.