EUROPE MARKETS: Europe Stocks Rebound Ahead Of Alcoa Earnings

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.

Shares of Hikma Pharmaceuticals PLC jumped 7.8% 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 3.2% higher and Royal Bank of Scotland Group PLC (RBS) up 2.7%.

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.

After the closing bell on Monday, aluminum giant Alcoa reports quarterly results, signaling the unofficial start of the second-quarter earnings season.

Among country-specific indexes in Europe, Germany's DAX 30 index gained 1.5% to 7,923.22, even as data showed exports slumped in May.

France's CAC 40 index added 1.3% to 3,803.13 and the U.K.'s FTSE 100 index picked up 1.2% to 6,450.82.

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