The Latest: European stocks close with strong gains
LONDON (AP) — The Latest on global financial markets (all times local):
Stock markets in Europe have closed with strong gains, buoyed by a recovery in the price of oil and hopes for more central bank stimulus.
Germany’s DAX rose 2 percent to close at 9,573.59 while France’s CAC 40 gained 1.8 percent to 4,298.70. Britain’s FTSE 100 ended 1.5 percent higher at 6,037.73 despite a drop in the pound triggered by uncertainty over the country’s popular vote this summer on whether to stay in the European Union.
Investors have been cheered by expectations that central banks will meet this week to possibly better coordinate their policies to support growth.
The European Central Bank has already said it is considering offering more stimulus to the 19-country eurozone economy at its next meeting March 10.
European stocks are higher after a soft survey of business activity across the 19-country eurozone bolstered the case for more central bank stimulus as soon as next month.
Financial information company Markit said its initial estimate of business activity — the so-called purchasing managers’ index — dropped to a 13-month low of 52.7 points in February from 53.6 in January. According to Markit, both manufacturing and the larger services sector recorded declines.
Analysts say the survey adds to the case for the European Central Bank to offer more monetary stimulus as its next meeting, on March 10. The central bank has said it would consider doing more, which could mean another interest rate cut or increasing the size or duration of its bond-buying stimulus program.
Germany’s DAX stock index was up 1.9 percent, while France’s CAC 40 rose 1.8 percent.
The price of oil is rising despite a gloomy forecast by the International Energy Agency.
The U.S. benchmark for oil was up $1.19 at $32.94 a barrel in electronic trading in New York on Monday. The international benchmark, Brent, was $1.27 higher at $34.28 a barrel in London.
The IEA said Monday that it expects the price of oil to rebound more slowly than it had earlier predicted. It said a glut of oil is likely to keep prices from any significant recovery until next year.
The drop in the price of oil, which has been caused by high supply as well as weakening demand, has been unsettling stock markets in recent weeks.
The pound is down sharply on concern that Britain’s popular vote on whether to leave the European Union could be closer than expected after senior politicians joined the “leave” campaign.
London Mayor Boris Johnson on Sunday said he would support the campaign in favor of leaving the 28-country bloc, arguing it would help restore power over national policies from Brussels.
Many investors and businesses are wary of such a move, however, as it creates uncertainty and could hurt the economy, at least in the short term. Economists say the U.K. largely benefits from the EU’s freedom of money and labor.
The pound was down 1.7 percent at $1.4166 on Monday.