European stocks experienced a modest rise on Monday, showing slight improvement following a lackluster performance in the previous session.
Investor sentiment was buoyed by expectations that the stimulus measures announced by China last week would reinvigorate the property sector in the world's second-largest economy. Additionally, optimism over potential interest rate cuts in the upcoming months played a supportive role in European markets.
European sovereign bond yields inched higher after ECB Governing Council member Martins Kazaks suggested in a Bloomberg Adria interview that June might be an appropriate time to commence lowering borrowing costs. However, he emphasized that any future moves would depend heavily on incoming data. Kazaks also stressed that any rate reductions should be "cautious" and "gradual," cautioning against hastening the process.
Meanwhile, ECB executive board member Isabel Schnabel also expressed concerns, advising against consecutive interest-rate cuts in June and July. "Based on current data, a rate cut in July does not seem warranted as there is a risk of easing prematurely," she told the Nikkei newspaper.
Over at the Bank of England, Deputy Governor Ben Broadbent mentioned that interest rates might be reduced during the summer, provided that current trends continue as expected.
Across the Atlantic, U.S. Fed Governor Michelle Bowman stated on Friday that she has observed no significant progress in inflation this year and remains open to raising rates should progress falter or reverse.
The pan-European Stoxx 600 index closed 0.8% higher. The U.K.'s FTSE 100 increased marginally by 0.05%, Germany's DAX and France's CAC 40 both advanced by 0.35%, while Switzerland's SMI rose 0.76%, marking its third consecutive session of gains.
Elsewhere in Europe, markets in Austria, Belgium, Finland, Greece, Netherlands, Poland, Portugal, Spain, Sweden, and Turkey finished higher, while Russia ended the day weaker.
In the UK market, Rolls-Royce Holdings surged nearly 4.5%. Fresnillo, Weir Group, Entain, and Airtel Africa saw gains ranging from 2.4% to 4%. Additionally, Ashtead Group, JD Sports Fashion, Melrose Industries, RightMove, ICG, Kingfisher, IMI, Lloyds Banking Group, Antofagasta, Centrica, Smiths Group, Admiral Group, and IHG rose by 1% to 2%.
Keywords Studios' shares skyrocketed approximately 61% following the announcement of potential talks with European private equity firm EQT Group concerning a possible cash offer valued at 2,550 pence per share.
Conversely, EasyJet, Burberry Group, Ocado Group, Sage Group, Prudential, Beazley, BT Group, Frasers Group, Imperial Brands, NatWest Group, and Reckitt Benckiser recorded losses between 1% and 3.2%.
In Germany, Covestro gained over 2%. MTU Aero Engines, SAP, Infineon, Deutsche Telekom, Commerzbank, BASF, and Henkel also reported significant gains. On the other hand, Siemens Energy declined by more than 2.5%, while Porsche, Puma, Mercedes-Benz, BMW, and Volkswagen experienced dips ranging from 1% to 2%.
In the French market, Teleperformance saw an increase of around 3%. Societe Generale, Safran, Airbus Group, Schneider Electric, Thales, and Kering posted gains of 1% to 2.3%. Conversely, Carrefour, STMicroElectronics, Engie, Renault, and Pernod Ricard ended the day lower.
