European stocks advanced the most in 10 weeks, as markets reopened after the Easter holiday, amid investor confidence that central banks will continue to support economies.
The Stoxx Europe 600 Index rose 1.6 percent to 404.34 at the close of trading. The equity benchmark has jumped 18 percent this year to within 0.3 percent of its 2000 record, amid optimism that European Central Bank stimulus will revive the region’s economy and the Federal Reserve won’t rush to raise rates.
Fed Bank of Atlanta President Dennis Lockhart said Monday that he favors pushing out the central bank’s first rate rise beyond the next two meetings, echoing Fed president William C. Dudley of New York, who said the path of increases is likely to be “shallow” once tightening begins. Minutes of the central bank’s latest meeting, after which it noted that “growth has moderated,” are due for release Wednesday.
“The Fed would rather err on the side of caution,” said Jasper Lawler, a market analyst at CMC Markets Plc in London. “They’re dovish by nature. They don’t want to make a mistake of lifting off too soon.”
U.S. Labor Department data showed Friday that nonfarm payrolls increased last month by the least since December 2013. Deutsche Bank AG said this supports its view “that the Fed will struggle to raise rates in 2015.”
Data on Tuesday showed a gauge of new orders recorded by manufacturers and service providers in the euro area in March rose to the highest level since 2011, London-based Markit Economics said. Employment increased at the fastest pace in more than 3 1/2 years.
A measure of energy shares rose the most since October 2011, for the biggest gain of the 19 industry groups on the Stoxx 600, as crude oil advanced. Seadrill Ltd. jumped 15 percent and Tullow Oil Plc climbed 5.5 percent. Commodity producers also advanced, with Glencore Plc adding 3.5 percent and Anglo American Plc rising 2.9 percent.
Among stocks moving on corporate news, TNT Express NV soared 28 percent after agreeing to a 4.4 billion-euro ($4.8 billion) takeover offer from FedEx Corp. TNT investors will receive 8 euros a share in cash, 33 percent more than the closing price on April 2.
PostNL NV, which holds about a 15 percent stake in TNT, jumped 12 percent.
International Consolidated Airlines Group SA dropped 1.2 percent and Deutsche Lufthansa AG slid 1.9 percent after JPMorgan Chase & Co. downgraded the airlines, citing flat margins and competition from Middle East rivals.