By Emily Horton
A rebound in oil prices and hopes that the Italian government may be able to find some common ground with the European Union over its budget provided a boost to European stocks on Monday.
Confirmation of the deal between the U.K. and the EU at a summit on Sunday also gave U.K. listed banks a boost.
How are the markets performing?
All European markets rose on Monday, with the Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP -3.26% gaining 0.8% at 356.76, after closing down 0.4% on Friday.
The German DAX /zigman2/quotes/210597999/delayed DX:DAX -3.68% was up 1% to 11,312.05 the French CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 -4.23% gained 0.6% to 4,975.74 and the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -5.25% added 0.7% to around 7,000. Leaping ahead, the FTSE MIB Italy index /zigman2/quotes/210598024/delayed IT:I945 -3.15% jumped 2.4% to 19,170.98.
The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0241% rose to $1.2855 from a close of $1.2793 in New York late on Friday. The euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.2693% held steady at $1.1374 from $1.1339.
What is driving markets?
Reports that the Italian government is considering a lower deficit of 2%, down from 2.4% in its budget were well received by the markets, and helped lift the financial sector, notably in Italy. What remains unclear is whether the move will satisfy the European Union, which has threatened a disciplinary procedure over what it sees as a violation of its fiscal rules.
London banking stocks got an extra lift after EU leaders on Sunday endorsed British Prime Minister Theresa May’s proposed Brexit plan, though winning parliamentary approval remains a major hurdle for the embattled leader.
What stocks are active?
Oil prices rebounded from some crushing losses last week, with some optimism ahead of next week’s OPEC meeting, and hopes for a possible cut to production. After making chunky losses on Friday. French oil company Total S.A /zigman2/quotes/206172043/delayed FR:FP -2.27% rose 0.9%, Royal Dutch Shell PLC /zigman2/quotes/205095589/composite RDS.A -9.42% added 1.4% and BP PLC /zigman2/quotes/207305210/composite BP -8.48% climbed by 2%.
Heavyweight bank HSBC Holdings PLC /zigman2/quotes/208272822/composite HSBC -4.18% was up by nearly 3%. Italian banks sprinted ahead with UniCredit SpA /zigman2/quotes/200769686/delayed IT:UCG -5.34% gaining 5% and Unione de Banche Italian SpA /zigman2/quotes/200732627/delayed IT:UBI -3.08% up 4.4%.