LONDON — European stock indexes advanced on Monday to build on Friday’s gains, although Italy’s main index was muted amid political uncertainty.
The pan-European Stoxx 600 rose 1.2 percent in early trade, with oil and gas shares up 2.9 percent to lead gains as all sectors and major bourses entered positive territory.
Swedish cloud computing firm Sinch was the biggest climber in early trade, adding more than 9%. At the bottom of Europe’s blue-chip index, Direct Line shares fell more than 13 percent after the British insurer canceled a 50 million pound ($59.6 million) share buyback and cut its profit forecast.
The generally positive start in Europe comes against a backdrop of more buoyant global sentiment. In the Asia-Pacific region, Hong Kong’s Hang Seng jumped more than 2 percent on Monday, while U.S. stock index futures were modestly higher early Monday morning after a positive end to last week.
Friday’s relief rally came as traders bet the Federal Reserve would be less hawkish at its upcoming meeting. The Wall Street Journal reported on Sunday that the central bank was on track to raise interest rates by 75 basis points at its meeting later this month, instead of the larger full-percentage-point hike some analysts had predicted.
Recession fears have dominated trading sentiment in recent weeks as market participants worry that aggressive action by the Fed – in an attempt to tame decades-high inflation – will eventually tip the economy into recession.
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Last week, fresh inflation data showed consumer prices rose 9.1 percent in June, hotter than expected and the biggest increase since 1981. That, in turn, prompted traders to bet that the Fed could raise rates by a full percentage point at its meeting in late July.
Haleon shares began trading on the London Stock Exchange’s main market on Monday as an independent, listed company after GSK shareholders approved the spin-off of its consumer healthcare business.
— CNBC’s Pippa Stevens contributed to this report.
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