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European shares rose on Monday, as prospects of new stimulus measures from the European Central Bank enabled the region's stock markets to shrug off weak German data and the resignation of the French government.
European Central Bank President Mario Draghi, speaking at a global central banking conference in Jackson Hole, Wyoming, said late on Friday that the ECB was prepared to respond with all its "available" tools should inflation drop further.
Draghi's comments helped offset negative pressures from weak German Ifo economic data on Monday, which showed that German business sentiment dropped for a fourth straight month in August, and from the French government's resignation.
"The stock markets are evaluating the prospect of possible monetary easing from the ECB as more important than the disappointing Ifo figures and French political troubles," said Carlo Alberto de Casa, senior market analyst at ActivTrades.
The Euro zone's blue-chip Euro STOXX 50 index closed up by 2.2 per cent at 3,165.47 points. Germany's DAX - which remains down by around 5.4 per cent from an all-time high of 10,050.98 points set in late June - also rose 1.8 per cent to 9,510.14 points. The London stock market was closed for a public holiday.
