European markets rise as policy stimulus hopes grow; Deutsche Bank 4% up

European markets rose on Monday morning as hopes emerge for stimulus from central banks and fiscal measures from major economies such as China and Germany.

The pan-European Stoxx 600 jumped 1 percent in early trade, with banks surging 1.6 percent as all sectors and major bourses traded in positive territory.

German finance minister Olaf Scholz said on Sunday that Germany has the fiscal strength to mitigate any future economic crisis with “full force” and suggested that Berlin could free up around 50 billion euros ($55 billion) of extra spending.

Meanwhile, China’s central bank unveiled a key interest rate reform on Saturday intended to lower borrowing costs for companies and reinvigorate an economy being negatively impacted by its trade war with the U.S.

U.S. Treasury yields, which has been causing global fears of a recession after plunging last week, showed signs of a rebound.

Asian stocks rose on Monday afternoon, led by mainland China with the Shenzhen component adding 2.39 percent and the Shenzhen composite surging 2.45 percent.

Back in Europe, leaked British government documents warning of the negative impact of a no-deal Brexit revealed that Britain could face food, medicine and petrol shortages should it leave the European Union without a deal on October 31.

Michael Gove, the minister in charge of planning for a no-deal scenario, said the documents were based on a worst case scenario, while British news outlets cited government sources as blaming the leak on a hostile former minister intent on undermining Prime Minister Boris Johnson’s negotiations with the bloc.

In corporate news, Swiss newspaper SonntagsZeitung reported on Sunday that a Novartis executive sold 925,400 Swiss francs ($946,000) worth of shares in the company less than three weeks before the U.S. Food and Drug Administration (FDA) announced that data from tests of its gene therapy had been doctored.

Stocks on the move

British banking group CYBG saw its shares climb 4.9 percent in early trade to top the Stoxx 600, while Deutsche Bank led a surge for the mainland European banking sector, gaining 4 percent after hitting an all-time low last week, closely followed by domestic rival Commerzbank, which also jumped 3.5 percent.

At the other end of the European blue chip index, Dutch chemicals company IMCD slipped 3.3 percent.

Source: CNBC