European stock markets rebounded on Monday after last week’s slump that took share prices to their lowest levels in two years.
Bargain hunters are out in force with investors grabbing shares that look to be good value after the recent declines.
But they remain nervous as the threat of recession still hangs over Europe and the US and there are persistent worries that the sovereign debt crisis in euro zone peripheral countries may spread to bigger regional economies.
Financial analyst Oliver Roth, of Close Brothers Seydler Bank explained: “Every wave of sales needs a break and I think we will see a break this week. The market is going to go sideways, and at the end of the week some economic data will be published which we will watch carefully as recession is an issue here.”
Brent crude oil is down on the belief that exports will soon resume from Libya.
Italian integrated oil firms were among the top performers on hopes of an end to the conflict in Libya. ENI , the largest foreign oil operator in Libya, rose 5.6 percent and Saras gained 4.6 percent on prospects for a resumption of oil operations were Muammar Gaddafi’s regime to fold.
Gold hit a new record high and is heading towards $1,900 an ounce. Investors are buying the precious metal as a safe haven from the current economic uncertainty.
The move into bullion comes as China’s top official newspaper said on Monday the crises currently impacting the United States and Europe will have a far-reaching impact on its real economy.
German Chancellor Angela Merkel appeared to close the door on the idea of “euro bonds”, which market commentators see as a way of the region easing the region’s debt troubles.
