LONDON - European stocks rocks rose Monday on speculation about possible new investment in the banking sector even as U.S. markets remain closed on Presidents Day, a public holiday. Asian markets were mixed.
The U.K.'s benchmark FTSE 100 rose 2.75 percent to 5,946.6, while Germany's Dax Index gained 1.98 percent to 6,967.55. In France, the CAC 40 advanced 1.89 percent to 4,861.80.
"It seems to be a combination of factors," said Keith Bowman, a broker at Hargreaves Lansdown Stockbrokers Ltd. "There was press speculation over the weekend that banks reporting this week may raise their dividends and possibly sovereign investment funds will increase their investments."
In Asia, Japanese stocks inched higher and Hong Kong shares sank amid concerns about further tightening measures in mainland China.
Australian shares also fell, led by Australia and New Zealand Banking Group after the lender said it expects earnings this fiscal year to be crimped by fallout from the global credit crunch.
But Chinese stocks jumped after the securities regulator granted approval of two new equity funds and the wealth management operations of nine mutual funds.
In Tokyo, the benchmark Nikkei 225 index rose 12.84 points, or 0.09 percent, to 13,635.40 as traders bought steel issues in the hope that rising demand in emerging markets will offset higher prices. Nippon Steel rose 3.2 percent and JFE Holdings added 6.3 percent.
Toshiba Corp. jumped 5.7 percent on reports it may withdraw from its struggling HD DVD business. Investors cheered the likely decision as lessening the potential for losses. Rival Sony, which supports Blu-ray disc technology, rose 1 percent.
Market observers say that it may take a while for the Nikkei to resume a stable upward trend even though current levels are higher than the January lows.
"What seems to be a recovery is merely a technical rebound," said Seiichiro Iwasawa, chief strategist at Nomura Securities. "Remember that the Nikkei has rebounded a few times since a huge dip in August last year, and this is like one of them."
Hong Kong's blue-chip Hang Seng Index dropped 1.61 percent to 23,759.25 points. It had gained 6.8 percent over the previous four sessions.
Analysts said traders were cautious due to continued concerns about the American economy. The Dow Jones industrial average slid 0.23 percent Friday.
"Most investors are taking a wait-and-see stance, given the sluggish trading volume," said Castor Pang, a strategist at Sun Hung Kai Financial.
The market expects the Federal Reserve to cut interest rates again at its next meeting in March. Hong Kong banks tend to follow U.S. interest rate cuts because the Hong Kong dollar is pegged to its U.S. counterpart.
Li Ka-shing's property flagship, Cheung Kong, fell 1 percent after gaining 8 percent in the past four sessions.
Investors were turning their focus to China, which was expected to release January consumer price data Tuesday. Analysts expect prices have risen 7 percent, which would be an 11-year high. They are worried that signs of surging inflation will trigger another round of tightening measures by Beijing.
But on the Chinese mainland, investors were enthused by a report Monday from the state-run China Securities Journal that nine domestic mutual fund companies have received regulatory approvals to begin wealth management operations.
"More money will mean prices of stocks will be pushed up, and some investors are buying ahead of the wave," said Huatai Securities analyst Zhou Lin.
The benchmark Shanghai Composite Index gained 1.58 percent to 4,568.15. China Daqin Railway rose 4.7 percent and Poly Real Estate Group gained 3.5 percent.