European Shares Shot Higher Inspired By Wall Street Sharp Rebound

European stock markets shot higher in early trading on Tuesday in the wake of a sharp rebound for Wall Street, with banks and resource stocks leading the gains.

The Stoxx Europe 600 index (XX:SXXP) +0.71% rose close to 1% to 242.52, after snapping a five-day losing streak the prior session with a 0.5% rise.

On Monday, the Standard & Poor’s 500 index SPX +1.60% rose 1.6%, its best performance in two months, with investors taking the view that sharp losses from last week — the worst of the year for Wall Street — were overdone.

Swedish retailer and the Stoxx 600’s second-biggest component, Hennes & Mauritz AB, (SE:HMB) +1.16% rose nearly 1.7% after analysts at HSBC upgraded the shares to overweight from neutral.

The FTSE 100 index (UK:UKX) +0.82% rose 1% to 5,359.61, led by a 1.6% rise for Vodafone Group PLC (UK:VOD) +1.85% VOD +0.73% . The mobile operator posted a 13% fall in full-year net profit, owing to an impairment charge of £4 billion related to businesses in southern Europe. Earnings before interest, tax, depreciation and amortization were in line with expectations.

Among resource stocks, shares of BP PLC (UK:BP) +0.44% BP +1.64% rose 0.8%, while Rio Tinto PLC (UK:RIO) +3.35% RIO +3.75% jumped 3.4% and BHP Billiton PLC (UK:BLT) +2.39% BHP +3.17% surged close to 3%. Shares of Anglo American PLC (UK:AAL) +2.15 gained 2.5%.

The German DAX 30 index (DX:DAX) +0.68% rose 1% to 6,397.52, led by a 2.2% rise for Volkswagen AG (DE:VOW3) +1.16% and a 1.9% rise for BMW AG (DE:BMW) +0.32% . Shares of Commerzbank AG (DE:CBK) +3.07% gained 1.7%.

Banks also supported the French CAC 40 index (FR:PX1) +0.58% , up 1% to 3,058.69. Societe Generale SA (FR:GLE) +2.36% gained 2.4% and Credit Agricole SA (FR:ACA) +1.68% was up 2%.

Autos were also sharply higher, with Renault SA (FR:RNO) +4.42% jumping 3.8% and Peugeot SA (FR:UG) +2.13% up 2.7%.

Truckmaker and Stoxx heavyweight Volvo AB (SE:VOLVB) +2.87% jumped 1.6%.