Europe Stocks Extend Rally, Banks Rise

European stock markets took a hint from an overnight rally in Asia and moved higher on Monday, with banks extending gains from last week and Ryanair Holdings PLC jumping after a well-received earnings report.

The Stoxx Europe 600 index XX:SXXP +0.14%  traded 0.1% higher at 307.96, adding to gains from Friday, when the index closed at the highest level since June 2008.

Shares of Ryanair IE:RY4B +5.85%  jumped 5.6%, after the budget airline reported a 13% rise in full-year profit and a 5% increase in passengers.

Peer firm EasyJet PLC UK:EZJ +4.42% rose 4.7%.

On a more downbeat note, shares of FirstGroup PLC UK:FGP -20.51%  sank 16%, after the transport operatorreported an 87% fall in full-year pretax profit and it said it won’t pay a final dividend for fiscal 2013.

For the broader European stock markets, investors were inspired by a rally in Asia, where Japanese stocks rose after the government upgraded its outlook for the domestic economy.

The gains followed another record-setting session for U.S. stocks on Friday, when both the Dow Industrials DJIA +0.80%  and the S&P 500 index SPX +1.03%  nudged all-time closing highs, after encouraging economic data.

Back in Europe, shares of STMicroelectronics NVFR:STM +3.06%  put on 2.8%, after J.P. Morgan Cazenove started coverage of the chip maker with an overweight rating.

Banks were also among notable gainers, as investors became more comfortable with moving into sectors traditionally perceived as more risky.

Royal Bank of Scotland Group PLC UK:RBS +4.25%  RBS +6.39%  rose 3.4% in London, Commerzbank AG DE:CBK +4.05%  added 2.4% in Frankfurt and Intesa Sanpaolo SpA IT:ISP -1.22%  climbed 1.9% in Milan.

The U.K.’s FTSE 100 index UK:UKX +0.22%  traded 0.1% higher at 6,732.62, while Germany’s DAX 30 index DX:DAX +0.57%  added 0.4% to 8,433.83.

France’s CAC 40 index FR:PX1 +0.25%  gained 0.1% to 4,004.24.

Marketwatch