Europe: Equities rally at open

[LONDON] European stock markets rallied at the start of trade on Monday, mirroring earlier gains in Asia, in a rebound from last week's global rout.

London's benchmark FTSE 100 index of major blue-chip companies jumped 1.7 per cent to 6,592.45 points.

In the eurozone, Frankfurt's DAX 30 added 1.4 per cent to 13,974.95 points and the Paris CAC 40 advanced 1.5 per cent to 5,789.06.

A drop in US Treasury yields handed markets some much-needed stability after concerns about rising rates sparked heavy losses while the passage of US President Joe Biden's stimulus through the House also provided some cheer.

Observers warned of continued fears that the expected global economic recovery will likel fuel inflation and force central banks to hike interest rates earlier than previously thought.

However, sentiment remains buoyed by the worldwide rollout of coronavirus vaccines whhich has boosted those recovery hopes.

"There has been a pause for breath after the bond market sell-off stabilised, although inflation concerns remain near the surface," said Interactive Investor analyst Richard Hunter.

"Those fears of inflation have certainly not gone away but attention has shifted back, perhaps temporarily, to the immediate positive drivers which could propel a strong economic rebound.

"More generally, the success so far of the vaccine rollouts and the pent-up consumer demand which has partly been due to enforced savings are preparing the ground for a spending spree later in the year."

AFP