At the close of trading on Monday, major European indices showed strong gains.
The STOXX Europe 600 rose by 1.25% to 436.57. The top gainers of the Stoxx 600 components were Deutsche Bank AG, Germany's largest financial conglomerate, adding 7.6%, Finnish tire maker Nokian Renkaat Oyj increasing by 7.2%, and German truck components supplier Knorr-Bremse AG soaring by 7.12%.
The UK's FTSE 100 rose by 0.53% to 7,193.47, the French CAC 40 gained 1.75% increasing to 6,369.94, and the German DAX climbed by 2.21% to 13,929.11.
Telecom Italia SpA, an Italian telecommunications company, rose by 5.2%. Yesterday, the company's management began negotiating on selling the company to US investment firm KKR & Co. Inc. In the fall of 2021, KKR made an offer to acquire Telecom Italia SpA Italy for €10.79 billion.
German carmaker Volkswagen AG jumped by 4.8% amid the company's report about a 75% increase in profits in 2021. In addition, Volkswagen raised dividends to its shareholders in 2022.
The capitalization of Britain's largest bank HSBC Holdings PLC increased by 2.1% on Monday. The bank reached an agreement to sell its retail banking business to the Greek company Pancreta Bank SA.
Shares of international French pharmaceutical company Sanofi SA fell by 0.7% yesterday. Representatives of the company announced the failure of the second phase of research of a new drug for breast cancer treatment.
On Monday, market participants continued to focus on the tense geopolitical situation in eastern Europe. Investors continue to hope that representatives of the Russian and Ukrainian delegations will reach an agreement as soon as possible.
Yesterday, Russian President Vladimir Putin said that there had been "some positive developments" in the negotiations. Amid the encouraging news, the world markets were in high spirits. Thus, at the opening of the US stock exchanges, the leading indicators began to rise from the first minutes of trading, while the euro continued to strengthen against the US dollar.
The Bank of England meeting, scheduled for Thursday, will be another important event for traders this week. According to analysts' preliminary scenarios, the regulator will once again raise the rate. In addition, the bank will make forecasts on some macroeconomic indicators.
The US Federal Reserve meeting scheduled for March 15-16 will be expected by European investors this week as well. Experts agree that the Fed will increase its key interest rate by 25 basis points to 0.5%.
In early March, Fed Chairman Jerome Powell said that the Central Bank of the United States planned to raise the benchmark rate by 25 basis points this month, and in the future, the Fed will be ready to act more aggressively if inflation in the US is increasing.
Meanwhile, the ECB held its benchmark interest rate at zero and its deposit rate at -0.5% at the end of last week's meeting.
At the same time, the regulator has adjusted the buyback of financial assets within the framework of the APP. In April, the Central Bank will buy back assets for €40 billion, in May - for €30 billion, in June - for €20 billion.
In addition, the European Central Bank worsened its forecast for eurozone economic growth this year to 3.7% from 4.2%.
Analysts suggest that traders remained disappointed by the lack of response from the European Central Bank to the geopolitical disaster in eastern Europe. Throughout the conflict between Russia and Ukraine, the West has been permanently imposing sanctions on Russia. Earlier this week, US President Joe Biden banned imports of oil products from Russia. Major global corporations have partially or completely suspended their activities in the country, despite the prospect of declining profits.
