By Nikhil Sharma
(Reuters) -European shares extended gains on Monday, supported by energy and healthcare stocks, with focus on Germany’s debt reform plans as Europe’s biggest economy looks to boost spending and revive growth.
The pan-European STOXX 600 was up 0.3% as of 0838 GMT. The index climbed 1.1% on Friday after Germany’s political parties agreed on a historic deal to ramp up state borrowing to fund defence and infrastructure investment.
Germany’s blue-chip index has outperformed its local peers, jumping 15.5% for the year, on prospects of sweeping fiscal reforms that includes a 500 billion euro ($540 billion) fund for infrastructure and changes to borrowing rules.
“When you get a crisis, you tend to get a solution and improvements, and that’s what the DAX has been anticipating for some time,” said Russ Mould, investment director at AJ Bell.
Germany’s parliamentary budget committee on Sunday approved the bill, likely to receive a green light in the lower house of parliament on Tuesday and by the upper house on Friday.
The oil and gas index led the gains on Monday by rising about 1%, buoyed by higher crude prices after the U.S. vowed to keep attacking Yemen’s Houthis until the Iran-aligned group ends its assaults on shipping. [O/R]
The healthcare sector also added 0.7%, with index heavyweight Novo Nordisk rising 3.2%.
Luxury stocks limited overall gains, with L’Oreal slipping 2.1%, Kering falling 2.3% and Burberry declining 2.2%.
The benchmark STOXX 600 index had registered a weekly loss on Friday as U.S. President Donald Trump’s constant flip-flops on tariffs amplified concerns about an economic slowdown.
Trump on Thursday threatened to slap a 200% tariff on European wine and spirits, as the European Union said it would levy tariffs on American goods next month after the United States’ 25% tariffs on steel and aluminum imports started kicking in.
The constant attack and retaliate trade policies have been the epicenter of extreme volatility for global markets in recent weeks.
Meanwhile, focus was also on interest rate decisions from major central banks, including the U.S. Federal Reserve and the Bank of England later in the week, with traders expecting the banks to keep rates on hold.
Phoenix Group rose 6.5% after the British insurer reported a better-than-expected rise in full-year adjusted operating profit and total cash.
Qinetiq Group sank 22% and was set for its worst day on record after the defence company warned of delays in several contracts in the UK and the U.S. that would affect its revenue for fiscal 2025.
(Reporting by Nikhil Sharma; Editing by Eileen Soreng and Maju Samuel)
