- Markets Insider
- FTSE 100, DAX, and the Euro Stoxx 50 are all up over 1% on Monday morning.
- Futures markets are also predicting a positive open in the US.
- Bounceback follows a sell-off in global markets last week.
LONDON – European stock markets started the week on the front foot, rallying strongly after a rebound for US stocks on Friday.
The FTSE 100 is up 1.12% in London to 7,154.13 points at 8.30 a.m. GMT. Gains were broad-based, with just three stocks in the red. Elsewhere, the German DAX is up 1.7% to 12,316.50 and the Euro Stoxx 50 is up 1.4% to 3,374.74.
The rally follows a rough week for stocks last week, during which the US Dow Jones Industrial Average suffered its biggest points drop on record before entering correction territory. That sparked a sell-off in Europe and Asia.
Connor Campbell, a financial analyst with SpreadEx, said in an email: “Investors will be hoping that Monday’s early gains means the market has cauterized its wounds following last week’s bloodbath.”
The FTSE 100 still has a long way to go to erase the losses it suffered last week, as the chart at the top of the piece shows. But it’s a start.
European markets are being helped by the fact that futures markets are predicting a positive open for US stocks. S&P 500 futures are pricing a 0.7% bump at the open while Nasdaq futures are predicting a 0.5% rise.
The positive momentum comes despite pessimistic comments from Bob Prince, the co-CIO of the world’s biggest hedge fund, Bridgewater Associates. Prince told the Financial Times in an interview on Monday he expects “a much bigger shakeout” in global equity markets.
Looking ahead, Campbell said: “There isn’t really that much for investors to work with this Monday, with the focus likely on Tuesday and Wednesday’s potentially week-defining UK and US inflation readings.
“However, there will be some interest in what MPC members Gertjan Vlieghe and Ian McCafferty – both of whom speak today – have to say following last Thursday’s hawkish statement from the Bank of England.”