European stocks posted solid gains on Monday morning, as investors digested fresh developments surrounding the U.K.'s withdrawal process from the EU. The pan-European STOXX 600 popped 1.15 percent in morning deals, with all major bourses ticking higher. Across the board, sectors showed a positive picture with banks, autos, insurance and energy leading the way.
As CNBC writes in an article "European markets rise after EU backs PM May's Brexit deal; Italian banks jump", in the corporate space, European lenders posted sharp gains in early trade with a number of Italian banks — including Unicredit, Banco BPM and Mediobanca — hitting the top of the benchmark. Italy continues to be closely watched, as investors await economic developments.
On Monday, Reuters reported, citing a government source, that the country's governing coalition has been looking into whether it should lower 2019's budget deficit target to as low as 2 percent of gross domestic product, to dodge a disciplinary procedure from Brussels. The rise in Italian banks boosted the FTSE MIB, which jumped over 3 percent in early deals.
On the corporate side, Eurofins Scientific rose over 4.5 percent, after the laboratory testing group confirmed its objectives for 2018, and extended its organic growth targets beyond 2020. Boskalis meantime jumped over 5 percent after announcing that it had signed an agreement with Saudi Aramco, to partner in its investment program.
Energy stocks received a boost during the session as oil prices bounced back from Friday's declines.In early European trading, U.S. crude was hovering just over $51, while Brent crude shot up over 2 percent, above $60 per barrel. The recovery in oil helped support markets in Asia, which were mixed to higher on Monday.
EU backs Brexit deal, obstacles loom
Over the weekend, leaders from the European Union (EU) chose to endorse the Brexit withdrawal deal laid out by U.K. Prime Minister Theresa May. The President of the European Commission, Jean-Claude Juncker said that the U.K. leader's agreement was the best deal possible for the U.K.; but added that he was sad at the U.K.'s decision to exit the EU, when speaking to reporters in Brussels.
While the backing from EU shows progress for May's withdrawal agreement, the deal still needs parliamentary approval. The British leader will now have to face officials in her home country during the weeks ahead.
Lawmakers from many U.K. political parties, including the opposition Labour party, have signaled that they would vote against the agreement. Consequently, investors will be keeping a close eye on the developments, to see how it impacts markets and sterling.
Elsewhere, investors are looking ahead to a G-20 summit set to take place in Argentina later this week, where President Donald Trump and President Xi Jinping are due to meet. The summit will be watched closely for how relations between both countries develop, in addition to further news surrounding trade.
