European stocks had their best day in nearly two weeks on Monday, following declines in the previous week, as a strong US jobs report reignited bets on a new aggressive interest rate hike by the Federal Reserve. .
* The pan-European STOXX 600 index gained 0.8%, stabilizing after breaking two weeks of gains on Friday.
* Almost all sectors rose, with economically sensitive sectors such as financial services and autos leading the gains.
* Attention is focused on a key inflation data in the world’s largest economy due later in the week. World stocks spooked on Friday after data showed a big jump in US employment, denting hopes the Fed would relent in its series of hikes aimed at curbing rising inflation.
* After ending July with gains of over 7%, the STOXX 600 has struggled this month to prolong momentum due to concerns over gloomy economic data, rising geopolitical tension and fears that rising rates will lead the economy into a recession.
* Euro zone investor confidence was virtually unchanged in August from a month earlier, with an increase too small to ward off recession fears, a survey found.
* “The European Central Bank and markets underestimate the risk of the energy crisis triggering a recession, and the ECB will eventually accept this and reconsider its rate policy,” BlackRock strategists wrote in a note.
* Meanwhile, European oil and health stocks were left out of the broad rise, up 0.6% and flat, respectively.