European shares rise as banks, tech rally

The pan-European STOXX 600 ended 1% higher, marking its biggest one-day jump since July 2

A rally ​in heavyweight banks and technology stocks lifted European shares on Monday, while oil prices slumped for the fourth consecutive session, boosting broader risk sentiment.

The pan-European STOXX 600 ended 1% higher, marking its biggest one-day jump since July 2. Most regional bourses also closed higher.

The move marks an upbeat start to the week, with investors assessing whether the pull-back in crude ​can ease inflation pressures. The European Central Bank raised interest rates earlier this month to combat inflation, as ​heavy reliance on fuel imports leaves regional countries exposed to swings in oil prices.

Despite ⁠persistent headwinds and above-target inflation, economic growth should pick up in the second half of the year, with ​the outlook in Europe stronger than consensus expectations, wrote Christian Schulz, chief economist at Allianz Global Investors.

Bank stocks were ​among the biggest gainers, up 1.7%. Societe Generale added 1.7% and Banco BPM was up 4.3%, with the latter rising after media speculation about UniCredit and Credit Agricole reportedly assessing a joint move on the Italian lender.

Technology stocks rose 1.7%, as renewed appetite for ​AI lifted chip-linked stocks such as Soitec and Aixtron.

However, energy stocks slid 0.8% as Brent crude futures headed ​for their longest streak of daily losses since June, after reports suggested more-than-expected supply was leaving the Gulf despite the ongoing ‌Iran war.

The ⁠move remains cautious rather than decisively risk-on. The main support is coming from lower oil prices and continuing strength in technology, helping offset concerns surrounding the latest Middle East escalation, said Naeem Aslam, chief investment officer at Zaye Capital Markets.

Germany’s DAX added 1.1%, with investors digesting the results of state elections in northeastern Germany, where projections ​showed the far-right Alternative for ​Germany emerging as the largest ⁠party.