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Oil uptick fails to electrify Europe markets; FTSE at 14-month high

Arjun Kharpal
Oil uptick fails to electrify Europe markets; FTSE at 14-month high

European equities closed mostly higher on Monday, despite a solid tick-up in oil prices and a strong performance from Europe's banks and miners.

The pan-European STOXX 600 (^STOXX) provisionally closed just above the flat line at 0.04 percent, with sectors pointing in different directions.

All major European bourses closed higher, with the U.K.'s FTSE 100 (FTSE International: .FTSE) and France's CAC 40 (Euronext Paris: .FCHI) closing up 0.2 and 0.1 percent respectively, while Germany's DAX (^GDAXI) popped 0.6 percent.

The FTSE 100 was at a 14-month high, boosted by its heavily weighted mining stocks.

European markets started off the day on a positive note, despite China's July exports falling 4.4 percent year-on year-on and imports declining 12.5 percent. Asian markets finished broadly higher on Monday, despite the data.

Early in the session, upward momentum continued from Friday's better-than-expected U.S. jobs report. This showed the country added 255,000 jobs in July.

Another factor influencing markets on Monday was the sharp rebound in oil prices. Crude prices extended gains during trade, amid renewed speculation that OPEC would try to restrain oil output.

Brent (London Stock Exchange: RRS-GB) and U.S. crude futures (London Stock Exchange: RRS-GB) hovered around $45.35 and $42.90 at Europe's stock market close.

Oil prices and upcoming retail sales data kept U.S. investors on their toes, but Wall Street stocks traded mostly lower at Europe's close.

Basic resources was Europe's best-performing stock sector on Monday. Although weak overall, the Chinese trade data showed Chinese iron ore imports rose 8.3 percent month-on-month in July to hit its second-highest level on record.

This helped shares of iron ore mining giants Rio Tinto (London Stock Exchange: RIO-GB) and BHP Billiton (London Stock Exchange: BLT-GB) to close sharply higher on Monday.

The banking sector helped pull European stocks up during trade. Barclays (London Stock Exchange: BARC-GB) shares rallied 3.6 percent after Exane BNP Paribas raised its price target for the stock, along with HSBC (London Stock Exchange: HSBA-GB) and Standard Chartered (London Stock Exchange: STAN-GB), which both finished in the black.

Italy's lenders were again in focus. Mediobanca shares closed up 3 percent after Kepler Cheuvreux raised its price target for the stock. Vincent Bollore is looking to raise his stake in Mediobanca to 22-23 percent to indirectly control insurer Generali, according to La Stampa. Generali shares also closed sharply higher.

Meanwhile, chief executive of Banca Monte dei Paschi di Siena (Milan Stock Exchange: BMPS-IT), Fabrizio Viola, said in an interview to Il Messaggero on Sunday that the rescue plan for the bank was the "right solution". The plan involves selling its bad loans to a special-purpose vehicle that is backed by private investors, as well as the state-backed Atlante fund. Shares in BMPS reversed earlier gains and sank to the bottom of Europe's benchmarks, off 4.67 percent by the close.

Aside from BMPS, several Italian banks finished sharply higher, with Banco Popolare (Milan Stock Exchange: BP-IT), Banca Popolare di Milano (Milan Stock Exchange: PMI-IT) and UniCredit all closing above 2.5 percent.

Among the other big movers of the day was Dutch mail and parcel delivery firm Postnl (: @PTNLLFDC16J-GB), which rallied to close over 8 percent up after it confirmed its outlook for 2016 and said it expected to resume dividend payments in 2017.

German retailer Hugo Boss (XETRA:BOSS-DE) sank over 4 percent after Societe Generale and Bryan Garnier cut their price targets for the stock.

Meanwhile, Credit Suisse and a handful of other brokers cut their price target for drugs giant Novo Nordisk (Copenhagen Stock Exchange: NOVO.B-DK), sending shares in the firm to close over 3.5 percent down.

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