LONDON (MarketWatch) - European shares rallied sharply on Monday morning, with oil majors and banks among the strongest performers.
The pan-European Dow Jones Stoxx 600 index (ST:SXXP: news, chart, profile) climbed 6% to 201.30. The index is still down about 46% from where it traded 12 months ago.
On Monday oil and natural gas producers stood out, with BG Group (UK:BG: news, chart, profile) up 12.3% and BP (BP:BP p.l.c.
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4:01pm 12/05/2008
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BP 43.52, +0.19, +0.4%) (UK:BP: news, chart, profile) up 7.3%.
Banks were also on the rise with shares of Deutsche Bank (DE:514000: news, chart, profile) up 9.6% and shares of Lloyds TSB (LYG:lloyds tsb group plc sponsored adr
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4:04pm 12/05/2008
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LYG 9.55, +0.10, +1.1%) (UK:LLOY: news, chart, profile) up 11.1%.
On a national level, the U.K. FTSE 100 index (UK:UKX: news, chart, profile) soared 5.8% to 4,285.43, the German DAX 30 index (DX:1876534: news, chart, profile) jumped 6.3% to 4,657.39 and the French CAC-40 index (FR:1804546: news, chart, profile) advanced 6.8% to 3,191.57.
U.S. stock futures were pointing to another day of gains.
On Friday, stocks erased losses and shot higher as insurer Hartford Financial Services Group Inc. led a rally in the financial sector by lifting its earnings forecast for the year.
The reassurances from Hartford helped pull focus from the government's report of a 553,000-job drop in payrolls last month, one of the starkest illustrations yet of the economy's struggle. See Friday's U.S. Market Snapshot.
"It was a very powerful statement by the equity market on Friday when U.S. stocks closed up 3% despite the worst employment report since 1951. This has to make some participants wonder whether, with all the worst possible news on the economy priced in, we can at least start to find some kind of bottom," said Kenneth Broux, economist at Lloyds TSB Corporates & Markets.
Back in Europe, Germany's Deutsche Boerse (DE:581005: news, chart, profile) climbed 7.2% while NYSE Euronext advanced 5.3%.
Deutsche Boerse said over the weekend that any talks held between the two exchange operators ended without a result. Reports had speculated the firms were mulling a tie-up. See full story.
U.K. hotel and restaurant operator Whitbread (UK:WTB: news, chart, profile) jumped 7.2%. Sales in the 39 weeks to Nov. 27 rose 6.7% on a comparable basis and 13.4% on a total basis.
"Our trading has been robust, although we have seen some softening of growth in November," Chief Executive Alan Parker said. The firm is planning to limit capital expenditure in its next fiscal year to roughly 200 million pounds, compared with 300 million pounds in fiscal 2009.
Shares in HSBC Holdings rose 3%.
The lender is planning to increase funding available for U.K. mortgage lending by 20% to 15 billion pounds in 2009, The Wall Street Journal reported.
Switzerland's troubled financial-services giant, UBS, advanced 6.1%.
The firm may announce as many as 4,500 more job cuts in coming weeks, Swiss newspapers reported Sunday.
