Europe midday: Stoxx surges on US shutdown deal hopes

(Sharecast News) - European shares continued to surge on Monday, extending gains on hopes that a deal to end the long-running US government shutdown was close.

The pan-regional Stoxx 600 was up 1.51% at 573 by 1159 GMT. Germany's DAX soared by 2% and France's CAC 40 was up 1.49%.

"Global markets kicked off the week on a positive note, buoyed by signs that the US government shutdown may soon be resolved. While the standoff hasn't turned into the market drag many feared a few weeks ago, the prospect of clarity is still welcome," said Hargreaves Lansdown analyst Matt Britzman.

"Investors tend to prefer stability and removing this uncertainty allows focus to shift back to earnings season, which is where the real story lies."

"Relief, rather than euphoria, seems to be the tone - but it's enough to keep sentiment on the front foot and US futures suggest a positive open this afternoon."

The US Senate on Sunday took a major step towards ending the longest federal government shutdown in history, after narrowly passing a compromise bill to reauthorise funding and reverse layoffs of some employees.

However, the measure excludes healthcare subsidies that Democrats have demanded and still has to pass the House of Representatives for approval and President Donald Trump before the government can reopen.

In equity news, Diageo shares spiked as the Guinness brewer announced the appointment of former Tesco chief executive Dave Lewis as CEO.

Kingspan shares jumped as the building supplies group reported an 8% rise in sales for the first nine months of the year.

Reporting by Frank Prenesti for Sharecast.com