European stocks rebound on Monday as volatility is seen as likely to continue

London (AFP) - Europe’s main stock markets rebounded strongly on Monday but Asia struggled to mount a recovery, as volatility grips global equities.

Around 1000 GMT, London’s benchmark FTSE 100 index was up 1.3 percent compared with the close on Friday.

In the eurozone, Frankfurt’s DAX 30 surged 2.1 percent and the Paris CAC 40 rallied 1.6 percent.

The dollar suffered further selling against the yen, seen as a haven investment, while the euro and the pound held their gains against the greenback on expectations of higher interest rates in Europe and Britain, traders said.

“Investors are breathing a sigh of relief after the torrid times last week, with European equity markets rallying,” said Rebecca O’Keeffe, head of investment at Interactive Investor.

“Buying the dip has been a very difficult call in recent days, with every attempt at engagement punished in subsequent market moves, so investors will be hoping that this is a genuine buying opportunity.”

Elsewhere Monday, Asian markets struggled to hold early gains.

After a stellar 2017 and a January that saw record and multi-year highs for stock markets around the world, traders are banking profits as rising US inflation lifts interest rates.

Equity markets, for years buoyed by post-crisis stimulus, have spiralled into the red as traders fret that the era of cheap cash is at an end.

Monday got off to a calm start across Asia but while some managed to stay in positive territory, the afternoon saw gains eroded or wiped out.

Hong Kong, which sank more than nine percent last week, closed down 0.2 percent, though Shanghai closed up 0.8 percent and Singapore rose 0.1 percent.

Seoul gained 0.9 percent, with traders cheered by signs of a thaw in relations between North and South Korea during the Winter Olympics.

Tokyo was closed for a public holiday.

Wall Street meanwhile experienced a late rally on Friday, with its three main indices ending on a positive note, though still well down over the week.

There are expectations meanwhile that further profit-taking will lead to further losses, with Brian Culpepper at James Investment Research warning: “Stocks are extremely expensive.”

Eyes are now on the release this week of US inflation figures Wednesday, which market-watchers say will be key to future movements.

In commodities trading, both main oil contracts rallied on Monday after sliding last week.

Bitcoin traded up at $8,772.99 from $8,552.65 on Friday.

- Key figures around 1015 GMT -

London - FTSE 100: UP 1.3 percent at 7,185.48 points

Frankfurt - DAX 30: UP 2.1 percent at 12,358.3

Paris - CAC 40: UP 1.6 percent at 5,161.90

EURO STOXX 50: UP 1.5 percent at 3,377.27

Hong Kong - Hang Seng: DOWN 0.2 percent at 29,459.63 (close)

Shanghai - Composite: UP 0.8 percent at 3,154.13 (close)

Tokyo - Nikkei 225: Closed for a public holiday

New York - DOW: UP 1.4 percent at 24,190.90 (close)

Euro/dollar: UP at $1.2266 from $1.2249 at 2200 GMT on Friday

Pound/dollar: UP at $1.3833 from $1.3828

Dollar/yen: DOWN at 108.67 yen from 108.78 yen

Oil - Brent North Sea: UP $1.07 at $63.86 per barrel

Oil - West Texas Intermediate: UP $1.16 at $60.36