European Equity Benchmarks Close Higher, Lifted by Rallying Bank Stocks

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The broad-based major European markets closed higher on Monday's trading session, as the exchanges were buoyed by rallying banking stocks and mining companies.

In economic news, the relationship between manufacturers and the banking sector in the U.K. still hasn't recovered from the credit crunch nearly 10 years ago, according to a report from EEF, the manufacturers' organization. and the decision to leave the European Union is only making things worse.

"Manufacturers' reluctance to rely on external finance is a persistent hangover from the credit crunch, where trust and confidence in the banks stalled and never quite recovered," said Lee Hopley, chief economist at EEF. "But with the Brexit vote dampening investment intentions and adding to uncertainty, this pre-existing condition could now become further aggravated, posing a risk for growth."

Airline bookings to the U.K. jumped thanks to the sudden and steep drop in the pound following the vote to leave the European Union, according to travel researcher ForwardKeys. There was a spike of 4.3% more flights booked to the U.K. in the 28 days following the vote, compared with the same time last year. Flights from Hong Kong surged by 30.1%, and flights from the U.S. and the rest of Europe rose by 9.2% and 5% respectively.

In Germany, the Federal Statistical Office reports that production in industry was up by 0.8% in June, compared to the previous month. Production in industry excluding energy and construction was up by 1.5% during the same month. Within industry, the production of capital goods increased by 3.5% and the production of consumer goods by 1.2%.

In equities, banking stocks and mining companies helped push the FTSE 100 into positive territory in London, led by Royal Bank of Scotland, and Barclays, which rose 3.7% and 3.6% respectively, while Lloyds Banking Group gained 2.6%. Mining companies Antofagasta and Bhp Billiton each closed 3.3% higher, while Anglo American and Glencore International were up 1.8% each.

Banking stocks also helped buoy the DAX in Frankfurt, as Deutsche Bank and Commerzbank rose 3.1% and 3.0% respectively, while financial services firm Allianz also moved up 3%. Meanwhile, utilities companies RWE and E.ON gained 2.2% and 1.4% each.

The CAC in Paris was also bolstered by rising financial stocks. Financial protection firm Axa, and French bank Credit Agricole rose 2.6% and 2.2% each, while banks BNP Paribas and Societe Generale gained 1.2% each. Building material company LafargeHolcim led the gainers, closing 2.9% higher, while steel and mining giant Arcelormittal increased 1.8%.

The FTSE gained 0.23%, the DAX rose 0.63%, and the CAC-40 edged 0.11% higher.

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Copyright (C) 2016 All rights reserved. Unauthorized reproduction is strictly prohibited.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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