European stocks closed at five-year highs on Monday, boosted by the news that Larry Summers had withdrawn his name from the race to succeed Ben Bernanke as chairman of the U.S. Federal Reserve. Global shares and bonds rallied as as result.
The pan-European FTSEurofirst 300 closed provisionally higher, after peaking at 1,262.25 in intraday trade, its highest level since mid-2008. The FTSE 100 unofficially closed up 0.6 percent, the French Cac closed up 0.9 percent and the German Dax closed up at 1.2 percent, an all-time closing high.
Summers, who is thought to be more hawkish than Bernanke, and more likely to curb the Fed's economic stimulus policies, was believed to be the frontrunner for the Fed job. He was previously one of the most important economic advisers to U.S. President Barack Obama's regime.
Janet Yellen, currently Bernanke's second-in-command, has emerged as the leading candidate following Summers' statement that he was removing his name from the list to avoid an "acrimonious" confirmation process. Yellen is perceived in the market as more likely to continue Bernanke's growth-focused policies.
Asian markets rose in early trading on Monday, before paring some of their gains as concerns about the Fed's policy meeting on Tuesday and Wednesday crept in. The U.S. dollar fell against the yen and other Asian currencies.
Follow us on Twitter: @CNBCWorld