Europe's Stocks Surge Amid Oil Price Drop
European shares rallied on Monday, led by gains in banks and technology stocks, as oil prices fell for a fourth consecutive session. The pan-European STOXX 600 index closed up 1% to its biggest one-day gain since July 2.
The rally was driven by heavyweight banks, which rose 1.7%, with UniCredit and Credit Agricole reportedly assessing a joint move on the Italian lender. Technology stocks also gained, with chip-linked companies like ASML Holding NV and STMicroelectronics SA advancing 1.7% due to renewed appetite for artificial intelligence.
However, energy stocks slipped 0.8% as oil prices continued their downward trend. Christian Schulz, chief economist at Allianz Global Investors, said that 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.
Naeem Aslam, chief investment officer at Zaye Capital Markets, noted that while the move remains cautious rather than decisively risk-on, lower oil prices and continuing strength in technology are helping to offset concerns surrounding the latest Middle East escalation.