Mineral extractors on the move; Friends Provident shares advance in London
By Sarah Turner, MarketWatch
LONDON (MarketWatch) -- European shares gained ground again on Monday, with banks some of the strongest performers as earnings remained a focus and following reports that U.S. lender CIT will be bailed out.
The pan-European Dow Jones Stoxx 600 index (ST:SXXP 214.12, +3.45, +1.64%) rose 1.5% to 213.74.
Banks were notably higher, with shares of Societe Generale (FR:GLE 43.70, +1.15, +2.70%) up 2.5% and Santander (ES:SAN 9.17, +0.20, +2.23%) shares up 2%.
The banking sector advanced last week, helping the Stoxx 600 index notch its first weekly gain in weeks, as investors eyed earnings from several major American banks, including Goldman Sachs. (GS 156.84, 0.00, 0.00%) .
"The news flow of the past week has clearly underscored that the prospect of further positive surprises in light of very low-key expectations is intact," said equity strategists at UniCredit.
On Monday, shares of Lloyds Banking Group (UK:LLOY 72.61, +5.13, +7.60%) (LYG 4.49, -0.24, -5.07%) rose 7.5% after a report over the weekend said that lender may post a surprise first-half profit when it reports later this week, even after taking hefty provisions.
A report that CIT Group Inc. (CIT 0.70, +0.29, +70.73%) has reached a $3 billion rescue-financing agreement with key bondholders that will allow the business lender to avoid bankruptcy and restructure outside court helped sentiment. See full story.
U.S. stock futures were higher on Monday, with Dow Jones Industrial Average futures up 56 points. See Indications.
The U.K. FTSE index (UK:UKX 4,461, +72.47, +1.65%) climbed 1.5% to 4,454.75, the French CAC-40 index (FR:PX1 3,277, +58.18, +1.81%) advanced 1.6% to 3,268.97 and the German DAX index (DX:DAX 5,059, +80.13, +1.61%) rose 1.5% to 5,052.79.
Shares finished higher in Asia on Monday. See full story.
In the energy markets, light sweet crude futures rose $1.06 to $64.62 a barrel, while gold futures climbed $14.00 to $951.50 an ounce in electronic trading.
Mineral extractors were firm, with shares of Xstrata (UK:XTA 717.10, +25.90, +3.74%) up 3.1% and shares of Rio Tinto (UK:RIO 2,238, +90.00, +4.18%) (RTP 145.21, +3.96, +2.80%) up 3.7%.
Boliden (SE:BOL 64.00, +1.00, +1.59%) shares climbed 3.9%. Second-quarter sales of 6.44 billion Swedish krona ($832 million) at the mineral extractor exceeded analyst expectations, although sales were lower than last year's 7.89 billion krona result.
Net profit rose to 432 million krona, from 259 million krona last year.
Deal speculation was also lending a hand in Europe, with shares of insurance group Friends Provident (UK:FP. 73.92, +2.33, +3.26%) up 2.3% after buyout firm Resolution (UK:RSL 91.25, -0.25, -0.27%) said Monday that it would be prepared to offer cash and shares to buy the firm.
