Europe midday: Stocks rally amid speculation of further Japan stimulus

European stocks advanced on Monday as investor sentiment was lifted on the prospect of further stimulus in Japan and by a strong US jobs report.

Japan Prime Minister Shinzo Abe said on Monday he would push ahead with his economic reform programme – known as Abenomics – after he declared victory in Sunday’s election.

A better-than-expected US non-farm payrolls report on Friday also continued to give the market a boost.

“A decent US payrolls number on Friday followed by a victory by Japanese Prime Minister Shinzo Abe in Japanese Upper House elections at the weekend has helped push Asia markets higher this morning with the Nikkei 225 posting its highest levels since June 24th on speculation that an improved mandate will prompt the Japanese government to finally implement the long awaited third arrow of Abenomics,” said Michael Hewson, chief market analyst at CMC Markets.

“Whether this takes the form of further stimulus as well as structural reform is open to question at the moment but the hope is that Shinzo Abe’s improved mandate will make him bolder in terms of policy steps to turn the Japanese economy around.”

Monday’s economic calendar is thin on the ground with the only notable release being the US Labour Market Conditions Index Change for June at 1500 BST.

The pace is set to pick up on Tuesday with German inflation data followed by China trade figures and the Bank of England’s Credit Conditions and Bank Liabilities Survey on Wednesday.

The main event this week is Thursday’s BoE policy decision with most analysts expecting the central bank will cut interest rates to address the fallout following Britain’s vote to leave the European Union on 23 June.

Meanwhile, oil prices fell as data on Friday from industry group Baker Hughes showed the number rigs looking for oil in the US rose by 10 to a total of 351, adding to concerns about the global supply glut.

Brent crude dropped 1.2% to $46.17 per barrel and West Texas Intermediate dipped 1.3% to $44.80 per barrel at 1157 BST.

On the company front, ThyssenKrupp rallied after the German steelmaker confirmed it was in talks with Tata Steel over sector consolidation.

Shares in Italian bank Monte Paschi advanced following reports that bank rescue fund Atlante will soon take on bad loans from Monte Paschi.

Software provider Cerillion gained after saying it secured a contract worth an initial £2.1m from a telecommunications company.

LafargeHolcim Ltd. climbed after agreeing to sell an Indian building-materials business to Nirma Ltd. for an enterprise value of about $1.4bn.

Airbus Group SE edged higher on reports that it may win an order for as many as 100 jetliners from AirAsia Bhd.