European equities finished higher on Monday shrugging off a sharp dip in oil prices, as investors looked ahead to a raft of central bank meetings and rate decisions this week.
The pan-Europeanclosed 0.7 percent higher provisionally with almost all sectors ending in positive territory. Oil and gas, however, wavered throughout trade, closing down 0.1 percent.
All major European bourses closed higher, with the majority of peripheral indexes following suit.
Oil prices fell deep into the red on Monday after Iran dashed hopes of a production cut, just days ahead of aOPEC also issued its latest report on Monday, saying it expected
was off some 4.5 percent by Europe’s close, slipping to $36.78 a barrel, while international benchmark was hovering around $39.13, a drop of some 3 percent. This weighed on , which were struggling for gains at Europe’s close on Monday. Most oil stocks, however, closed only slightly lower or higher, except , which jumped almost 5 percent.
was Europe’s best performing sector on Monday, closing up 1.7 percent, despite a slip in both oil and metal prices. ended 6 percent higher, while and both posted strong gains, closing above 4 and 2.5 percent respectively.
Central bank week
European markets generally followed a positive trend set in. Global traders have began to take a more positive view of the European Central Bank’s (ECB) monetary policy decision last week.
They have also been buoyed by comments from a Chinese regulator on Saturday which stated that it wouldn’t relaunch a market circuit breaker for the next few years.
Investors will be looking ahead to more central bank decisions this week with the Bank of Japan’s monetary policy meeting on Monday (its rate decision is due on Tuesday), the U.S.’ Federal Open Market Committee holding a two-day meeting starting on Tuesday (with an interest rates decision due Wednesday) and the Bank of England meeting on Thursday. Norway and Switzerland also hold monetary policy meetings this week.
Europe’swas treading water on Monday, ahead of the slew of announcements this week, with the sector closing 0.1 percent up.
The best performer on the Stoxx 600 index was Italian bank, finishing 10.2 percent higher, after Italian newspaper La Repubblica reported that Prime Minister Matteo Renzi had asked Italian state lender Cassa Depositi e Prestiti and Intesa Sanpaolo to consider a potential acquisition of the bank.
La Repubblica added that both options faced hurdles, according to a Reuters report on the story. Shares of the bank were briefly suspended in morning trade.
One of the worst performers on the index was French defense and security company, finishing trade over 6 percent down, after it confirmed on Monday that it was selling its Morpho Detection business, and said it was reviewing strategic options for its identity and security activities, Reuters reported.
Shares ofslipped some 5.4 percent after HSBC cut the stock to reduce from a hold recommendation.
DAX higher despite Merkel defeat
Thewas on a tear on Monday, closing up 1.6 percent, despite German Chancellor Angela Merkel’s CDU party suffering big defeats in regional elections this weekend. and criticism of Merkel’s refugee policy.
Also giving markets a boost were data released on Monday that showed industrial output in the euro zone rose dramatically in January, by 2.1 percent month-on-month , above forecasts of 1.7 percent in a Reuters poll.
-Saheli Roy Chaudhury contributed to this market report.
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