By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets rallied on
Monday, rebounding after a selloff at the end of last week when
better-than-expected U.S. jobs data stoked fears the Federal
Reserve will soon scale back stimulus.
Investors further awaited U.S. bellwether Alcoa Inc. (AA) to
kick off the earnings season later in the day.
The Stoxx Europe 600 index rose 1.2% to 291.65, after shaving
off 1.3% on Friday.
Shares of Hikma Pharmaceuticals PLC jumped 8.8% in London after
the drug maker said it now expects revenue growth around 17% in
2013, up from the 13% previously expected.
Banks were also among major advancers, with shares of Banco
Comercial Português SA rising 4.6%, Jyske Bank AS 3.8% higher and
Royal Bank of Scotland Group PLC (RBS) up 5.3%.
The broader stock market regained most of the territory it lost
on Friday, when a stronger-than-expected jobs report in the U.S.
for July sent stocks lower in Europe. U.S. Federal Reserve Chairman
Ben Bernanke has said the central bank could start scaling back its
$85-billion-a-month asset-purchase program if data such as new jobs
shows the economy is growing as expected, leaving investors worried
that less liquidity in the financial system will create market
turmoil.
The International Monetary Fund's managing director, Christine
Lagarde, warned on Sunday that central banks must be careful when
they exit expansive monetary policy, according to The Wall Street
Journal. Read: IMF takes another swipe at U.S. budget cuts
U.S. stock futures pointed to a higher open on Wall Street on
Monday, after light trade on Friday on the back of the Fourth of
July holiday on Thursday. Read: 6 gut checks before the stock
market's opening bell
After the closing bell on Monday, aluminum giant Alcoa reports
quarterly results, signaling the unofficial start of the
second-quarter earnings season.
"This certainly has the potential to provide some pace for
markets as a whole with investors looking increasingly anxiously at
how balance sheets are stacked up, as the era of very cheap money
threatens to come to a close," said Mike McCudden, head of
derivatives at Interactive Investor, in a note.
In Greece, the Athex Composite index picked up 0.8% to 847.34.
The country's "Troika" of international lenders--the European
Commission, the European Central Bank and the International
Monetary Fund -- reached a staff-level agreement with the Greek
authorities on new economic and financial policies needed to ensure
the bailout program remains on track. Euro-zone finance ministers
meet later in the day to discuss Greece's next tranche of bailout
money.
Among other country-specific indexes in Europe, Germany's DAX 30
index gained 2.3% to 7,982.79, even as data showed exports slumped
in May.
Shares of BMW AG gained 3.4% after the car maker said group
sales rose by 6% in the first half of the year, while June sales
reached an all-time high.
Other car makers tracked BMW higher, with shares of Volkswagen
AG up 2.6% and Daimler AG rising 2.9%.
France's CAC 40 index added 1.6% to 3,815.33 and the U.K.'s FTSE
100 index picked up 0.8% to 6,427.51.
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