Shares Close Higher on Chinese Data, Spain

European shares closed higher on Monday after strong macroeconomic data out of China, upbeat comments about Greece's future in the euro zone, and hopes that Spain is edging closer to requesting a bailout.


The FTSEurofirst 300 Index provisionally closed 0.5 percent higher at 1, 098.60 points.

On Monday, Reuters quoted senior euro zone sources as saying that Spain is expected to make a bailout request in November, although Spanish Prime Minister Mariano Rajoy has remained adamant in public that the country does not need bailing out.

A bailout deal would open the door for Spanish bond purchases by the European Central Bank, under its pledge to stand by the euro.

The Spanish IBEX 35 Index provisionally closed up 0.2 percent.

"It seems that there is a constructive mood around in Europe, " said Gerhard Schwarz, head of equity strategy at Baader Bank. "That's what the markets want to see."

That more positive sentiment was supported during the session by U.S. retail sales data that rose more than expected in September, buoying the outlook for the world's largest economy and raising the prospect of a boost to sales for European firms operating there.

German Finance Minister Wolfgang Schauble had some positive words for Greece on Sunday , saying the country would not default, although he warned that if it exited the euro zone, it would be damaging for Greece as well as the whole area. On Monday, the yields on Greek 10-year bonds has dropped to their lowest level since the country's debt restructuring in March this year.

In Asia, positive export data for September was announced in China , showing exports overshot expectations by roughly twice the rate expected.

In stocks news, banks — which have direct exposure to euro zone sovereign debt — saw the most gains across Europe with Standard Chartered, Credit Agricole, Commerzbank and UBS all closing firmly in the black.

Royal Bank of Scotland shares were in the spotlight on Monday . Virgin Money and private equity entrepreneur Christopher Flowers have emerged as possible bidders for 316 RBS branches, after Spanish bank Santander unexpectedly pulled out of a deal on Friday.

Bidding opens this week for BP's 50 percent share of Russian oil company TNK-BP . The Russian state-owned oil company Rosneft is favorite to buy the British oil giant's stake.

In Norway, Orkla and Hydro announced on Monday that they are set to combine and form the world's largest aluminum solutions provider.