European stock markets rose on Monday as the region began the new week on a positive note amid encouraging political developments in Germany. At 03:05 ET (08:05 GMT), Germany’s DAX index gained 0.7%, France’s CAC 40 advanced 0.6%, and the UK’s FTSE 100 inched up 0.1%.
Political sentiment was boosted by news that preliminary coalition talks between the conservatives led by Friedrich Merz and the Social Democrats concluded on Saturday. The parties are now racing to finalize a deal before next week, with plans to push for an easing of Germany’s borrowing limits in parliament to stimulate growth in Europe’s largest economy.
This potential for additional fiscal stimulus in Germany has lifted sentiment across the eurozone. JPMorgan has revised its economic growth forecast for the region for 2025, now expecting 0.8% growth—up from 0.7%—and 1.2% growth in 2026, compared to its earlier forecast of 0.9%. “This revision is primarily driven by Germany, but we also anticipate slightly stronger growth across the rest of the region from spillovers and slightly looser fiscal policy,” JPMorgan economists noted in a recent report.
Economic data added to the optimistic tone, with German industrial output in January rising by 2.0% compared with the previous month—well above expectations of a 1.5% increase.
The Eurogroup is set to meet in Brussels later this week, with European Central Bank President Christine Lagarde participating, following the ECB’s recent interest rate cut aimed at boosting growth.
In addition, attention will be focused on an upcoming meeting in Saudi Arabia between U.S. and Ukrainian officials, scheduled for Tuesday, to discuss a potential peace deal to end the conflict in Ukraine. This follows a contentious meeting last month between President Donald Trump and Ukrainian President Volodymyr Zelenskiy, which led to a withdrawal of military aid and intelligence from Ukraine.
On the technology front, Taiwan Semiconductor Manufacturing Company (NYSE:TSM) reported a substantial jump in February 2025 revenue, driven by robust demand for chips used in artificial intelligence and high-performance computing applications. The world’s largest contract chipmaker continues to benefit from strong global demand for advanced semiconductor technologies.
In the energy sector, crude oil prices traded largely unchanged on Monday after falling to more than three-year lows last week amid concerns over slowing demand due to trade tariff uncertainty. At 03:05 ET (08:05 GMT), Brent futures rose 0.1% to $70.49 per barrel, while U.S. West Texas Intermediate futures inched up 0.1% to $67.10 per barrel. The market remains cautious as recent Chinese consumer and producer inflation data indicated persistent deflationary trends in the world’s largest oil importer.
Overall, European markets appear set for further gains as investors remain optimistic about both the political developments in Germany and potential fiscal stimulus measures, even as global economic and geopolitical uncertainties persist.