European shares inched up on Monday, with the pan-European STOXX 600 index up 0.1% and the blue-chip STOXX50 index hitting a 22-year peak. However, rate-sensitive technology shares fell 1.2%, tracking overnight losses on Wall Street, while banking shares, the biggest gainers on Friday, fell 0.3%.

On Monday, the European markets opened higher and followed the lead of Asian markets. Most Asian markets started the day in the red but recovered later. The Japanese Nikkei was marginally higher, the Hong Kong Hang Seng was up 1.6%, and China’s Shanghai Composite was up 1.4%.

Meanwhile, crude oil prices edged lower, but Brent crude futures remained above $80. The US West Texas Intermediate futures decreased 0.2% to $82.2 per barrel.

The British FTSE was trading half a per cent higher, the French CAC was trading 0.2% higher, and the German DAX, the biggest European market by volume, was trading 0.3% higher.

Investors remain optimistic about US corporate earnings this week, with a slew of earnings reports led by Goldman Sachs, Morgan Stanley, and Bank of America due later in the week. Last week, Citigroup, JPMorgan Chase & Co, and Wells Fargo & Co beat earnings expectations, benefiting from rising interest rates and easing stress fears in the banking system. However, investors are cautiously optimistic as they monitor ongoing worries about the knock-on effect of higher interest rates.

Money market participants now see a 64% chance of the Fed hiking its key benchmark rate by 25 basis points in May, according to the CME Group’s Fedwatch tool, after last week’s mixed US economic data. European Central Bank (ECB) officials, including President Christine Lagarde, will be on investors’ radar. Economic data, including the euro zone’s March inflation, manufacturing, and services activity for April, will also be released later in the week.

After the energy crisis subsided and China’s economy was rid of lockdowns, European Markets started on a solid foot. Then came the collapse of the US banks and Credit Suisse and uncertainty about rate hikes worldwide, leading to a solid impact on global markets. Although the past rate hikes by the ECB are yet to be absorbed by the economy, the Chief of the German Central Bank, Joachim Nagel, believes that the ECB needs to keep raising interest rates to overcome the risk of price growth getting entrenched.

Several European companies saw significant increases in their shares on Monday.
Sega agreed to launch a €706 million offer to acquire Rovio, the Angry Birds maker, leading to a 17.8% rise in its stock. Payments providers Worldline and Nexi proposed a takeover of Network Intentional, boosting both companies’ stock by over 3%. John Wood Group shares rose 7% after considering a fifth takeover offer from Apollo Management for a final buyout valuation of £1.66 billion ($2.06 billion) at 240 pence per share.