European Stocks Higher on Recovery Hopes; Oil Stocks up After Attack on Saudi

European stock markets pushed higher Monday helped by gains from the oil majors as crude prices soared, while hopes for a global recovery from the Covid-19 pandemic also supported financial stocks..

At 3:55 AM ET (0855 GMT), the DAX in Germany traded 0.9% higher, the CAC 40 in France rose 0.7% and the U.K.’s FTSE index climbed 0.6%.

The heavily-weighted oil majors helped push the overall markets higher, with BP (NYSE:BP), Royal Dutch Shell (LON:RDSa) and Total all posting stock gains of over 1%.

This followed strong gains in crude prices as Houthi rebeles in Yemen fired missiles targeting the Saudi Arabian oil industry on Sunday, including Saudi Aramco’s facility at Ras Tanura, which is capable of exporting roughly 6.5 million barrels a day. Saudi Arabia reported no loss of life or significant damage to the facilities.

U.S. crude futures traded 0.9% higher at $66.65 a barrel, just off its highest level since October 18, while the international benchmark Brent contract rose 0.9% to $69.97, earlier climbing above $70 a barrel for the first time since the pandemic began.

Banking and insurance stocks were also supported by the ongoing rise in bond yields, even though the economic recovery appears likely to arrive later in continental Europe than in the U.S. and U.K. due to delays in rolling out vaccines against Covid-19. The Stoxx 600 Banks index rose 2.6%, with banks from the Netherlands and Sweden to Greece hitting their highest levels in over a year.

Earlier, China’s exports surged in the first two months of the year, up over 60% in dollar terms, reflecting strong global demand for manufactured goods, and boosting confidence that the global economy is in a strong recovery phase.

Additionally, the U.S. Senate passed the $1.9 trillion stimulus package, proposed by President Joe Biden earlier this year, over the weekend. This raises the likelihood that this bill will be passed into law before enhanced jobless benefits expire on March 14.

Equity markets have been boosted over the last few months by the expectation that loose fiscal and monetary policy will give a powerful boost to the economic recovery, but optimism has been tempered by fears over rising inflation and interest rates.

In European corporate news, Direct Line (LON:DLGD) stock rose 0.7% after the insurer declared both a final dividend and a share buyback even as its pretax profit fell in 2020.

Pearson (LON:PSON) stock fell 3.1% after the company launched a review of its international publishing businesses as its adjusted profit and revenue fell in 2020.

Also of interest was the announcement that food delivery firm Deliveroo plans a London listing in the first half of 2021, which is expected to value the company at more than $7 billion.

Elsewhere, gold futures fell 0.4% to $1,692.50/oz, while EUR/USD traded 0.3% lower at 1.1876.