Europe stocks close higher; FTSE up 1%

Published Mon, Feb 17 2014 4:30 PM ESTUpdated Mon, Feb 17 2014 11:31 AM EST

European stocks closed higher on Monday, with a rally in mining stocks helping the U.K.'s FTSE 100 to post healthy gains of over 1 percent.

European markets

TICKER	COMPANY	PRICE	CHANGE	%CHANGE
.FTSE	FTSE 100	8,420.26	-18.39	-0.22%
.GDAXI	DAX	18,704.42	-34.39	-0.18%
.FCHI	CAC 40 Index	8,167.50	-20.99	-0.26%
.FTMIB	FTSE MIB	35,398.82	-11.31	-0.03%
.IBEX	IBEX 35 Idx	11,327.70	+28.40	+0.25%

Italy set for change

The pan-European FTSEurofirst 300 Index provisionally closed higher, with the basic resources sector the standout gainer as stronger commodities prices and favorable analyst research helping stocks higher.

Polymetal and Randgold Resources were both strong performers.

The sector also received a boost from China, with the country's benchmark Shanghai Composite index rising to its highest levels in two months on Monday with economic optimism ahead of Thursday's HSBC's flash purchasing managers' index (PMI) for February.

In Italy, center-left leader Matteo Renzi was nominated as Italy's next prime minister after Enrico Letta officially resigned on Friday. President Giorgio Napolitano gave Renzi a mandate to form a government on Monday morning.

The Democratic Party (PD) forced Letta to resign last week with Renzi, 39, at the forefront of the coup, promising bold economic reforms and a government than can survive until 2018.

Micheal Hewson, a market strategist at CMC Markets called the rise in European markets "surprising" given the political uncertainty in Italy.

"One can only assume that financial markets think that he will succeed where his predecessors Enrico Letta and Mario Monti failed in gaining enough support to push through the reforms that they failed to implement," he said in a morning note.

"This belief does seem naive in the extreme given that Mr Renzi will come up against the very same problems, and dysfunctional political backdrop that bedeviled his predecessors, notwithstanding the fact that he will also be the third unelected Prime Minister in a row."

Italian shares traded slightly higher in Monday's session.

US markets closed

In Asia, equity markets rose on the first trading day of the week following a strong lead from Wall Street on Friday, while investors shrugged off weak economic data from Japan.

Japan's benchmark Nikkei rebounded after sliding to a one-and-a-half-week low earlier in the session following disappointing fourth-quarter gross domestic product data. The economy grew a quarterly 0.3 percent from October to December, below estimates for a 0.7 percent gain.

U.S. stocks ended the week with gains on Friday; the blue-chip Dow led gains to close 0.8 percent higher while the S&P 500 added 0.5 percent despite mixed data. Consumer sentiment was unchanged in early February, while January export prices rose by slightly more than expected.

All U.S. markets closed are closed on Monday due to the Presidents' day holiday.

In other stocks news, shares of DCC, the sales and marketing company that provides services to the energy sector, were down nearly 1 percent after lowering its guidance for the year due to milder weather. Despite the early morning slump, shares bounced back to trade over 4 percent higher.

ThyssenKrupp shares fell 1.7 percent after the steelmaker received a downgrade from analysts at Citi.

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