London: Europe’s main stock markets rose on Monday following strong gains across Asia on China holding rates steady and takeover activity involving the energy and pharmaceutical industries.
In London, the FTSE 100 index climbed 0.82% to 5,860.75 points and in Frankfurt the DAX rose 0.33% to 7,029.39 points, its highest close of the year.
In Paris, the CAC 40 advanced 0.91% to 3,892.44 points.
European stocks followed Asian markets higher, which rose on China holding interest rates steady despite official data showing accelerating inflation.
Traders feared that a rise in Chinese interest rates would slow growth, dragging global trade down with it.
Shanghai’s Composite index jumped 2.88%, its best one-day percentage gain since 15 October, to 2,922.92 points, while Hong Kong’s Hang Seng rose 0.67% to 23,317.61 points.
Tokyo ended up 0.80% at 10,293.89, while Sydney’s S&P/ASX 200 rose 0.23 % to 4,757.1.
“Investor sentiment has received a shot in the arm ... with a slew of merger and acquisition activity, as well as clarity on Chinese monetary policy which doesn’t include an interest rate hike,” said Joseph Hargett of Schaeffer’s Investment Research.
Over the weekend China’s leaders pledged to ensure “stable and healthy” economic development and to manage inflation expectations in an “active and stable way” in 2011, but held off on an immediate interest rate hike despite inflation topping five percent for the first time in more than two years.
On Wall Street, the Dow Jones Industrial Average climbed 0.31 percent to 11,445.40 by midday, while the S&P 500 index, a broader measure of the market, rose 0.38 percent to 1,245.10.
The tech-rich Nasdaq was up 0.08% at 2,639.64.
Elsewhere in Europe, Amsterdam advanced 0.31%, Brussels put on 0.34%, Madrid added 0.29%, Milan rose 0.72%, Lisbon climbed 0.57% and Swiss stocks were flat.
“The mining companies are leading the way today (in London) ... on the back of stronger metals prices despite the higher-than-expected inflation figures from China over the weekend,” said David Jones, an analyst at IG Index trading group.
“In the past, these sorts of releases have knocked sentiment in the miners due to worries about China taking steps to try and moderate growth but the fact that there has been no suggestion of interest rate rises has been met with relief and helped support this rally.
“This has put the FTSE at its best level in more than a month, leading many investors to hope, that like Christmas, the Santa rally appears to start earlier every year,” Jones added.
The energy sector was also in focus as a Chinese oil firm signed a deal with Norway’s Statoil, while US industrial conglomerate General Electric launched a friendly takeover for British oil services company Wellstream Holdings worth 1.3 billion dollars (982 million euros).
Elsewhere, the world’s largest printer of banknotes De La Rue, which is currently mulling a takeover approach from a French rival, said it had chosen Tim Cobbold to be its new chief executive.
Cobbold, former chief executive of British power systems group Chloride, is taking over from James Hussey, who resigned in August after De La Rue revealed banknote production failures.
The appointment comes one week after French banknote printer and chip card maker Oberthur Technologies announced a takeover bid for De La Rue worth about 900 million pounds (1.1 billion euros, 1.4 billion dollars).
Household goods firm Reckitt Benckiser meanwhile said it had agreed to buy Indian company Paras Pharmaceuticals for about 460 million pounds (549 million euros, 726 million dollars).