Banks lead relief rally for European stocks, RWE jumps

European shares enjoyed a relief rally Monday after geopolitical tension had sent them to their worst weekly losses of the year.

The pan-European STOXX 600 rose 0.7 per cent while euro zone stocks and blue-chips jumped 0.9 per cent.

The tension between the United States and North Korea had caused their worst losses this year, down 2.7 per cent on the week. The banking sector, the worst hit last week, led gains, up 1.4 per cent, with Deutsche Bank, Commerzbank, and Standard Chartered Bank all up 2.5 to 2.7 per cent.

Shares in German energy group RWE jumped three per cent to the top of the STOXX after it said it was aiming for the top end of its 2017 profit forecast, with first-half results boosted by better gas plant performance.

AG (Rhenish-Westphalian Power Plant), is a German electric utility company based in Essen, North Rhine-Westphalia.

Through its various subsidiaries, the energy company supplies electricity and gas to more than 20 million electricity customers and 10 million gas customers, principally in Europe.

RWE is the second largest electricity producer in Germany and has increased renewable energy production in recent years. RWE is the leader among utilities stocks this year, up 60 per cent since January.

Danone shares gained two per cent after the New York Post newspaper speculated the firm could be a bid target. A spokeswoman declined to comment on the report.

UK mid-cap Ladbrokes Coral meanwhile was among a handful of fallers, down 2.7 per cent after Credit Suisse cut the stock to “underperform” from “neutral”. Standard Life Aberdeen, the merged asset manager was among top

European gainers on its first day of trading, up 2.7 per cent. Fiat Chrysler shares jumped 3.5 per cent, leading autos stocks.

With 82 per cent of MSCI Europe corporates’ quarterly results through, energy and basic materials stood out as the winners so far.

Meanwhile, consumer cyclical and industrial companies have mostly missed analyst expectations.