Europe close: Stocks jump as oil prices sink, inflation risks ease

21st Sep 2026 16:24

(Sharecast News) - Stock markets across Europe surged on Monday on easing inflation concerns as oil prices retreated towards $100 a barrel, while bond yields pulled back sharply.

The Stoxx 600 finished 1.1% higher at 642.34, with indices across Frankfurt, Milan, Madrid and Zurich all rising 1% or more. London and Paris gained 0.8% and 0.9%, respectively.

Even Germany's DAX pushed higher amid increased political uncertainty despite a disastrous showing for Chancellor Friedrich Merz's CDU in two local elections where the extremist AfD party made further gains.

"A week ago markets were grappling with a possible slowdown in AI development, worrying about a cutoff in Saudi oil supplies and bracing themselves for a Fed rate hike," said Chris Beauchamp, chief market analyst at IG.

"Talk of a slowdown has disappeared, Saudi oil supplies are holding up better than feared and the first Fed rate hike of a possible new cycle is behind us. Sentiment has shifted accordingly, and today looks like the start of a much more durable rally."

Brent crude was down 3.5% to $100.29 a barrel by the close, while West Texas Intermediate dropped 4.6% to $95.68 a barrel, as Saudi Arabia increased exports through the Strait of Hormuz following disruptions to its East-West pipeline due to attacks by Iran-backed Houthi rebels last week.

Analysts at JP Morgan said total oil flows ​averaged 17.1m barrels per day (bpd) in the past 10 days, just 6.1m bpd below the 2025 average.

Also weighing on the oil price were comments from US president Donald Trump, who said he would "probably be open" to a meeting with Iranian president Masoud Pezeshkian at the UN General Assembly in New York this week.

Trump was also in focus ahead of a scheduled summit with China's Xi Jinping this week, with the main talking points expected to be trade, AI and Iran.

In equity news, shares in Novo Nordisk fell sharply after the company's set out new long-term goals in a turnaround planned to compete with rivals in the weight loss market. The Danish pharma giant said it aimed to launch more than five drugs with "multi-blockbuster" potential by 2030 and generate more than 150 billion Danish kroner in risk-adjusted pipeline sales by 2035, including current assets.

Société Générale rose after the French lender unveiled higher profitability targets and said shareholder distributions could exceed €21bn over the next four years. At its Capital Markets Day, SocGen said it was targeting a return on tangible equity of 13% to 14% in 2029, rising to more than 15% from 2030 onwards. That compares with a 2026 target of above 10%, which itself had been raised from the 9-10% goal set out in its previous strategic plan.

In other news, Lotus Bakeries jumped after Jefferies initiated coverage of the stock at 'buy', while Nordnet gained as the digital bank and online brokerage platform announced a buyback programme, while biotech firm Ipsen fell 6%.