By Sarah Turner, MarketWatch
LONDON (MarketWatch) -- European shares advanced on Monday, with oil giant BP trading sharply higher amid deal speculation, and as investors awaited the start of the U.S. second-quarter earnings season.
The Stoxx Europe 600 Index gained 0.4% to 251.18 in a choppy session, with shares of oil major BP jumping 9.4% to 399 pence.
The euro could rise a little longer
Upbeat remarks from ECB president Trichet and uncertainty about a U.S. double-dip recession will keep the EUR supported for a while. But it will then fall as concerns about European banks rise and data help resolve the U.S. outlook either way.
Monday's move for the index built on a 5.4% gain made last week, the best weekly performance in more than a year, as economic data, central-bank comments and some details on European bank stress tests boosted sentiment.
"Despite the rebound in risk last week, markets are left with much to ponder. The next milestones are the release of corporate earnings and the results of the European bank stress tests," said strategists at Citigroup.
Aluminum giant Alcoa Inc. /zigman2/quotes/200686102/composite AA +2.31% , set to report earnings after the close on Wall Street, unofficially kicks off the start of the U.S. second-quarter earnings season.
Of the main regional benchmarks, the French CAC-40 index /zigman2/quotes/210597958/delayed FR:PX1 +0.11% rose 0.4% to 3,567.66, the U.K.'s FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.37% closed up 0.7% at 5,167.02 and the German DAX index /zigman2/quotes/210597999/delayed DX:DAX +0.18% added 0.2% to 6,077.19.
In a reversal of Sunday's World Cup soccer final result, the Dutch AEX index rose 0.7% to 326.56, while the Spanish Ibex 35 index declined 0.7% to 10,058.2.
• MarketWatch Topics: Middle East
• Asia Markets | Europe Markets | Lat. Am.
• Canadian Markets | Israel Stocks | London
• U.S.: Market Snapshot | After Hours
• Latin American and Canadian indexes
• European indexes | Asian indexes
More on the Markets
• Global Economic Calendar
• Bond Report | Oil News | Earnings Watch
• Currencies | U.S. Economic Calendar
"The Dutch lost last night, but Spain faces the more uncertain economic future. They will need deep reserves to maintain their demonstrable competitive spirit in the years ahead," said economists at Royal Bank of Scotland.
Asian shares ended mixed, while U.S. stocks turned lower in morning trading.
Shares of BP /zigman2/quotes/202286639/delayed UK:BP -0.36% /zigman2/quotes/207305210/composite BP -0.35% climbed in London after the firm said that the installation of a new containment cap was proceeding as planned. The cap is intended to capture more of the oil that's been leaking into the Gulf of Mexico since an explosion on the Deepwater Horizon rig in April.
Also, the Sunday Times newspaper reported, without citing sources, that BP management was in talks to sell up to $12 billion of assets to Apache Corp. /zigman2/quotes/200648444/composite APA +0.15% , the U.S. oil firm, including a big stake in Alaska's Prudhoe Bay.
The newspaper reported that Exxon Mobil /zigman2/quotes/204455864/composite XOM +0.49% was mulling a takeover bid for the company. Read more on BP.
Also trading higher, Zodiac Aerospace shares climbed 7.1% to 42.62 euros.
The firm said over the weekend that it had received, and rejected, an approach from rival Safran /zigman2/quotes/206963350/delayed FR:SAF -0.22% , whose shares fell 2.6%.
Safran said that it "acknowledges the reaction of Zodiac's board while remaining convinced of the obvious logic from an industrial and a strategic perspective." Read more on Safran's approach.
Meanwhile, shares of German airport operator Fraport /zigman2/quotes/202529115/delayed DE:FRA -3.96% rose 2.6%. The company said the total number of passengers at its five majority-owned airports rose 11.8% during June to 9.2 million, with cargo throughput up 27.5% from a year earlier.
Groupe SEB /zigman2/quotes/210398461/delayed FR:SK -1.58% shares gained 6.3% after an upgrade to buy from neutral at Goldman Sachs. The broker said that it's raising forecasts for the manufacturer of irons and coffee machines to reflect geographic exposure and currency.
Kontron shares dropped 18%. The firm, which makes computers for slot machines, said that it will take a 34 million euro provision for outstanding receivables from customers in Malaysia, Taiwan and Hong Kong.