Europe Markets

European stocks close higher; DAX hits 1-month high


European markets closed higher on Monday after hints from the U.S. Federal Reserve's Janet Yellen and James Bullard about when the Fed might next raise interest rates.

The pan-European STOXX 600 closed around 0.2 percent higher. Germany's DAX index ended around 0.5 percent higher and hit a one-month high, while the French CAC 40 closed unofficially 0.3 percent higher.

The DAX was helped by data that showed German import prices in April fell 6.6 percent year-on-year, faster than the 6.2 percent forecast by analysts.

The CAC was boosted by the news that France's economy grew by 0.6 percent in the first quarter, according to its national statistics office on Monday. That was faster than the initial 0.5 percent forecast.

London's FTSE 100 was closed on Monday due to a public holiday and trading volumes across Europe were low.

U.S. markets were closed for Memorial Day.

Europe followed U.S. and Asian markets higher after Yellen on Friday reiterated her call that a Federal Reserve interest rate hike could be around the corner.

Her comments were backed by St. Louis Federal Reserve President James Bullard on Monday. Speaking in South Korea, the policymaker said markets were "well-prepared" for a rate hike.

Analysts said there was growing consensus for a near-term rate hike.

"The key thing here is, are they going to hike and then wait half a year again…or are they going to hike … faster?" Thomas Harr, global head of FICC research at Danske Bank, told CNBC on Monday.

Stock watch

Shares of Airbus closed 0.5 percent higher after the French company said it would meet its target of over 650 total deliveries in 2016 after a slow start to the year.

Netherlands-listed shares of Postnl surged to close 3.5 percent higher after Sunday's news that takeover talks with Belgian mail operator Bpost had failed. Bpost shares closed 2.4 percent lower on Monday.

Italian banking stocks rallied and then pared gains on Monday after newspaper Corriere della Sera reported on Saturday that pension funds and private pension groups may invest in Atlante — Italy's bank rescue fund. Banca Monte Dei Paschi Di Siena (BMPS) traded 3.2 percent higher, before paring gains to close nearly 2 percent up.

In terms of other economic data, the European Commission's economic sentiment index for the euro zone rose to 104.7 in May, up from the 104.0 in April.

Meanwhile, Spanish consumer prices fell 1.1 percent year-on-year in May.

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