LONDON (MarketWatch) -- European shares on Monday extended sharp gains made last week, as investors continued to buy commodity producers amid hope that the global economic recovery is gaining traction.
The Stoxx Europe 600 index (ST:SXXP 257.28, +0.19, +0.07%) rose 0.2% to 257.58, building on a 4.6% gain made last week when worries about Greece's debt problems abated and Friday saw a smaller-than-forecast decline in nonfarm payrolls.
Commodity firms saw their shares rally sharply on Friday as investors started to factor in a pick-up in demand and pushed up oil and metal futures.
Miners and oil and gas firms were strong again on Monday, with Anglo American (UK:AAL 2,691, +24.00, +0.90%) up 1.2%, with the dollar weakening against the euro to $1.3670 on Monday. Further signs of European support for Greece emerged over the weekend, with French President Nicolas Sarkozy stating that a number of countries were ready to rescue Greece if necessary.
There was some specific news helping commodity firms as well, with BHP Billiton (UK:BLT 2,234, +27.00, +1.22%) (BHP 79.18, +2.82, +3.69%) , up 1.8%, announcing that it has agreed terms for most of this year's hard coking coal sales.
Meanwhile, deal speculation also emerged in the sector, with oil giant Royal Dutch Shell (UK:RDSA 1,877, +3.00, +0.16%) (RDS.A 57.06, +1.00, +1.78%) up 0.3% after offering to buy assets of Australia's Arrow Energy.
Also, shares of oil services firm Petrofac (UK:PFC 1,093, +22.00, +2.05%) rose 1.9% after the firm posted a 33% rise in fiscal-year profit to $353.6 million and said that it received $7.3 billion of orders in 2009, up sharply from $2.9 billion in 2008.
The German DAX index (DX:DAX 5,883, +5.52, +0.09%) rose 0.2% to 5,891.23 and the French CAC-40 index (FR:PX1 3,911, +0.12, +0.00%) rose 0.2% to 3,917.81.
The U.K. FTSE 100 index (UK:UKX 5,601, +1.72, +0.03%) climbed 0.2% to 5,612.36, after closing Friday at its highest level since Sept. 2, 2008.
Gains for commodity stocks also helped Asian shares to rise on Monday. U.S. stock futures were pointing to a flat open on Wall Street after shares gained strongly on Friday.
In Paris, shares of EADS (FR:EAD 15.92, -0.03, -0.19%) rose 0.4% after an agreement on the A400M military transport plane was reached late Friday. EADS upped its A400M loss provision by 1.8 billion euros before tax for 2009.
U.K. insurer Prudential (UK:PRU 532.00, +12.00, +2.31%) (PUK 15.89, +0.27, +1.73%) rose 2.1%, taking back some sharp losses made in the last week, after it said it is accelerating its plans for a listing on the Hong Kong Stock Exchange.
Prudential said it isn't proposing to offer any new shares under the listing, other than those being issued through its rights issue. Prudential is planning to raise $20 billion in a rights issue to help pay for its proposed $35.5 billion acquisition of American International Group's Asia operations.
Metro (DE:MEO 40.85, +0.51, +1.25%) shares were up 1.8% after Morgan Stanley upgraded the German retailer to equal-weight from underweight.
"Although Metro's disappointing fourth-quarter sales update highlighted ongoing difficulties in Eastern Europe, we believe sequential improvement is on the horizon," the broker said.
Forth Ports (UK:FPT 1,395, +283.00, +25.34%) leaped 25% to 1,400 pence in early London trade after disclosing late Friday that it received and rejected two takeover bids.
Forth Ports owns a portfolio of seven ports in the U.K., including Tilbury in London, Grangemouth, Scotland's largest container port, and Leith in Edinburgh
