European shares hit six-week highs on Monday helped by stronger financials and a rally in Portugal after the euro zone member regained investment grade rating.
Economic recovery continued to whet appetite for the region's equities and the pan-European STOXX index was up 0.5 per cent by 0840 GMT.
Lisbon blue chips were the star performers though after Standard & Poor's on Friday became the first of the big three credit ratings agencies to lift Portugal back to investment grade, citing its improving economy and public finances.
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After being hit this summer by an unexpected surge in the euro, European stocks have regained footing thanks to ongoing sings of a pick-up in economic growth, which more than offset geopolitical and monetary policy uncertainty.
“The euro zone is in a very good spot currently, we believe, as it benefits from any rise in bond yields, and most of the near-term damage from a stronger euro is likely already absorbed,” JPMorgan strategists led by Mislav Matejka said.
JPMorgan has an overweight rating on euro zone stocks and expects financials like banks and insurance companies and cyclicals to outperform the market into the year-end.
Europe's bank index rose 0.9 per cent with gains in Spain's Santander, France's BNP Paribas, ING Groep and Italy's UniCredit helping the index recover all losses made in the previous session.
Among the biggest gainers on the STOXX were utilities EDF and Fortum, up 4.7 per cent and 3.7 per cent respectively, after both were upgraded by Goldman Sachs.
Ryanair was a weak spot, down 2.7 per cent following its announcement of plans to cancel between 40 and 50 flights per day until the end of October, disrupting hundreds of thousands of journeys.
Outside of the STOXX, Fingerprint slumped 21 per cent after the Swedish biometric company warned its third-quarter revenue was likely to fall to 800 million crowns to 840 million Swedish crowns ($101 mln-$106 mln) in what it called a “cautious" market