Europe Stocks Rise on Stimulus Hints

European shares rose tentatively in early trade Monday, still feeling the effects of last week's hints at further stimulus from Mario Draghi.

In early trade, the Stoxx Europe 600 was 0.1% higher, while Paris's CAC gained 0.2% and London's FTSE 100 was broadly unchanged. Frankfurt's DAX edged a little less than 0.1% higher ahead of the release of the German Ifo business climate index for November, due at 0900 GMT.

The climbs build on last week's rally that followed the European Central Bank president's speech in Frankfurt, in which he said it was necessary to bring eurozone inflation up to the ECB's target "without delay."

Barclays economists however, said Friday's speech was "one of his most candid to date."

"Although [Mr. Draghi] maintained that longer-term indicators on the whole remain within a range that the ECB considers consistent with price stability, his language is increasingly reflecting the growing concern that they soon could also fall below this range," they said.

Asset classes considered to be risky, such as southern European government bonds, remained in strong demand Monday, having also rallied on Friday. Spain's 10-year government bond yield, for example, fell below 2% on Monday for the first time in the euro era. Yields fall as bond prices rise.

Also bolstering global sentiment was China's central bank surprise cut in interest rates. Monday, Hong Kong's Hang Seng Index closed almost 2% higher.

Brent crude was trading 0.2% lower at $80.25 per barrel. Gold was 0.1% higher on the day at $1,198.50 a troy ounce.

Write to Josie Cox at [e-mail]

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