European Stocks Surge as STOXX50, DAX, and CAC40 Recover from Weekly Decline

European stock indices posted strong gains early Monday, snapping a losing streak that had weighed on investor sentiment over the prior week. The STOXX50 index rose 1.4% to close at 5,128.3, while Germany’s DAX advanced 1.6% to 18,742.1, and France’s CAC40 climbed 1.3% to 7,825.6. The FTSE100 also rebounded, gaining 0.9% to reach 8,341.5, driven by strength in financial services and industrial manufacturing. The rally was broad-based, with financials leading gains across all three major benchmarks, followed by consumer and industrial stocks. Trading volumes increased by 18% compared to the previous day’s average, signaling renewed market confidence. The recovery comes after European equities had fallen 2.1% over the prior week, pressured by concerns over inflation persistence and mixed corporate earnings. Despite no major macroeconomic data or central bank announcements, the rebound suggests a technical correction following oversold conditions. Investor attention remains focused on upcoming inflation reports from Germany and France, as well as the European Central Bank’s upcoming policy meeting in January. The move marks a shift in sentiment among short-term traders and portfolio managers, who had scaled back exposure during the week’s decline. The gains were particularly notable in mid-cap segments, with the STOXX Europe 600 Mid Cap index rising 1.8%, outpacing the broader index. Market participants are now assessing whether the rebound is sustainable or merely a short-term bounce ahead of a potential slowdown in early January.