European stocks rose Monday, with appetite for risk increasing on hopes that central banks and governments will keep stimulus measures in place.
The pan-European Stoxx 600 Index was 1.2% higher at 243.99. London's FTSE 100 Index gained 1% to 5193.30. Frankfurt's DAX rose 1.3% to 5557.36, and the CAC-40 Index in Paris was 1.1% higher at 3746.59.
Over the weekend, a Group of 20 finance ministers' communique highlighted concern about the strength of the nascent global economic recovery, and pointed to low interest rates and other measures staying in place.
As a result, the uptrend in global equities appears to be intact, said Ian Williams, strategist at Altium Securities. "Investors have concluded that central bank action involving persistent monetary stimulus remains a favorable backdrop for risky assets, and equities continue to fit the bill," he said.
The basic resource sector posted strong gains early Monday after spot gold hit a new record high in Asia, boosted by a weaker dollar and the prospect of loose monetary policy and stimulus packages staying in place for some time.
"Unless there's a turn in U.S. interest rates, gold will be well bid," said Ronald Leung, director at Lee Cheong Gold Dealers in Hong Kong. At 0855 GMT, spot gold traded at $1097.75 per troy ounce, up 80 cents from the New York close after hitting a new all-time high of $1105.15 an ounce, taking gold's gains this month to 5.5%.
Shares in Rio Tinto added 2% while Lonmin shares gained 1.9%. The pan-European Dow Jones Stoxx 600 basic resource index advanced 2%.
Mergers and acquisitions were on investors' minds on reports that Kraft Foods is likely to launch a hostile bid for Cadbury PLC, valued at roughly £10 billion ($16.61 billion). The U.K.'s Takeover Panel has set a 5 p.m. (12 p.m. ET) deadline for the U.S. food giant to make a revised bid or walk away for six months.
"We sense that the majority on the Cadbury shareholder register is committed to a bid and not loyal to the current management. So, we will watch events with interest, but we continue to reiterate our ongoing point that the market is offering 766p for Cadbury's in cash today," said Clive Black, analyst at Shore Capital Stockbrokers. Cabury shares traded 0.5% higher.
On Wall Street Friday, GE paced the move higher even though the U.S. payrolls report showed that the unemployment rate rose above 10% last month, weighing on commodities prices and keeping any stock gains muted. The Dow Jones Industrial Average gained 0.2% to 10023.42, while the S&P 500 finished up 0.2% at 1069.30.
The Dow's gains were led by GE, which rose 6.2% after the industrial conglomerate received a boost from a couple of analyst upgrades and reports of progress in GE's efforts to sell its NBC Universal unit to Comcast. The companies have since settled on how to value NBC Universal now and in the future, clearing a key obstacle to giving Comcast control of GE's television and movie company, according to people familiar with the matter.
Friday's positive finish on Wall Street lent Asian markets support Monday. Indexes across the region were mostly higher, with AXA Asia Pacific surging in Australia, after spurning a multibillion dollar takeover offer from rival wealth management firm AMP.
Japan's Nikkei 225 finished up 0.2%, while Australia's S&P/ASX 200 closed up 1.8%. South Korea's Kospi Composite gained 0.2% and Hong Kong's Hang Seng Index tacked on 1.5%.
In the foreign exchanges, the dollar traded lower against the euro and the pound, with traders saying the U.S. jobs data has reinforced the greenback's downside bias.
"There's no way the Fed can hike its policy rates for now. In the end, it's a dollar-sell trend," said Nomura Securities senior dealer Hiroshi Maeba in Tokyo. At 0900 GMT, the euro was trading at $1.4965, up from $1.4847 late Friday in New York. But against the yen, the dollar was at 90.12 yen, up from 89.88 yen.
In the oil market, crude was higher, with Nymex December crude up $1.20 at $78.63 per barrel. Meanwhile, European bond markets were little changed, with the December bund futures contract last seen at 120.94, down 0.01.
