Forexpros – European stock markets were higher in thin trade on Monday, as market sentiment was lifted by new hopes of progress in Greece, easing concerns the country may be forced out of the euro zone.
During European morning trade, the EURO STOXX 50 rose 0.28%, France’s CAC 40 added 0.36%, while Germany’s DAX 30 advanced 0.69%.
Market sentiment found support as opinion polls on Sunday showed that Greece’s conservative party New Democracy swung into first place ahead of next month’s elections, as the country’s socialists claimed that European leaders are warming to the idea that bailout terms for Athens should be softened to ease pressure on the economy.
Uncertainty remained however, as talk of contingency plans have emerged in case Greece leaves the euro zone, posing severe contagion risks to the whole monetary union.
Financial stocks were mixed as Dutch lender ING Group surged 1.37%, France’s BNP Paribas climbed 0.56% and German Deutsche Bank added 0.34%, while Spanish lenders BBVA and Banco Santander plummeted 1.62% and 1.19% respectively.
Concerns over the health of Spain’s banking sector continued to weigh after Spain’s government announced Sunday that it was to recapitalize one of the country’s largest commercial lenders, Bankia.
Bankia shares were suspended on Friday, shortly before it announced it made a loss of EUR3 billion in 2011 and was seeking government aid, and plunged 30.88% after the stock resumed trading on Monday.
Separately, Standard & Poor’s cut the credit ratings of Bankia, Banco Popular and Bankinter to junk on Friday, citing Spain’s weakening economy. The rating company had downgraded 11 Spanish banks on April 30.
Meanwhile, steel company ArcelorMittal saw shares advance 2.28% after announcing that it is to supply 8300 tons of rail for EUR8.4 million for Invensys Rail Dimetronic’s first Westrace 2.0 interlockings project in Spain at Lasarte and A?orga, on the EuskoTren’s Bilbao – San Sebasti?n route.
In London, commodity-heavy FTSE 100 rose 0.55%, supported by strong gains in the mining sector.
Rio Tinto led gains, with shares surging 2.44%, while Anglo American jumped 1.99% and Bhp Billiton advanced 1.61%.
Copper producers Xstrata and Kazakhmys contributed to gains, as shares climbed 1.89% and 2.06% respectively.
U.K. lenders were also broadly higher. Shares in Lloyds Banking jumped 1.63% and Barclays advanced 1.49%, while the Royal Bank of Scotland and HSBC Holdings rose 1.01% and 0.24%.
Trade looked likely to remain quiet on Monday, with some markets in Europe closed for holidays, while U.S. markets were to remain closed for the Memorial Day holiday.
Forexpros
