Europe's STOXX 600 rose on Monday, supported by gains across all major sectors, rebounding from its worst weekly performance this year on worries of higher-for-longer U.S. and eurozone interest rates.
The blue-chip index (.STOXX) added 0.9%. It fell 1.4% last week after hotter-than-expected U.S. inflation data fuelled bets that the Federal Reserve would continue to raise rates.
All major euro area sector indexes rose in the first hour of trading, with 1.2%-1.6% gains in the riskier parts of the market, including oil & gas (.SXEP), technology (.SX8P) and autos & auto parts (.SXAP).
Miners (.SXPP), among the biggest losers last week, bounced 0.8%. Defensive sectors such as healthcare (.SXDP) and telecoms (.SXKP) posted the smallest gains.
European retailers (.SXRP) rose 1.1%, led by a 3.1% increase in shares of Hennes & Mauritz (HMb.ST). Associated British Foods (ABF.L) climbed 1.2% as the Primark owner raised its full-year financial outlook following a strong first-half performance.
Mould highlighted that consumer spending has been buttressed by gas prices coming down and help from government-support schemes across the single-currency bloc.
Headline price pressures in the eurozone have shown signs of easing recently but the European Central Bank is still expected to hike rates in March on worries that inflation could be stickier than markets were expecting.
Nonetheless, the STOXX 600 has outperformed the S&P 500 index (.SPX) so far this year, boosted by recent data showing an improving economic outlook and by China's reopening.
Commerzbank (CBKG.DE) celebrated its return to Germany's DAX (.GDAXI) with a 4.3% jump to the top of the blue-chip index, from which the country's No. 2 lender was removed in 2018.
Dechra Pharmaceuticals (DPH.L) tumbled 15.5%, to the bottom of the STOXX 600, as the veterinary drugs maker warned its full-year operating profit would be at the lower end of analysts' expectations.
The final estimate of the euro area consumer confidence for February will be released later in the day.
