The pan-European STOXX 600 index was up 0.2%, while UK’s FTSE 100 rose 0.7% and Germany’s DAX gained 0.2%.
Oil majors BP, Royal Dutch Shell and Total rose between 1.6% and 3.3% as crude prices hit their highest since February 2020 following Saudi Arabia‘s pledge to cut output in a meeting with allied producers.
Banks advanced 2.6%, the most among sectors, with UK’s HSBC, Spain’s Santander and France’s BNP Paribas providing the biggest boost.
Construction & material stocks such as CRH and Heidelbergcement also outperformed on hopes of more infrastructure spending under a Democrat-controlled Senate.
While the final votes are yet to be counted, markets appeared to price in a ‘blue wave’ that could usher in larger fiscal stimulus and pave the way for President-elect Joe Biden to push through greater corporate regulation and higher taxes.
In Europe, a pullback in healthcare and tech shares capped gains in major bourses. On Wall Street, tech-heavy Nasdaq was on track to tumble 2% at the open, while growth-linked Dow was set for a slight dip.
“Europe will take its cue from the U.S. markets and what’s interesting at the moment is that the Dow could open down, which is perhaps surprising given the perception of those results,” said Connor Campbell, analyst at SpreadEx.
European gains were also tempered as major economies look to extend lockdowns to fight a surge in coronavirus cases, with a new virus variant spreading fast across the continent.
Germany is extending its lockdown until the end of the month, while a third national lockdown should not be ruled out in France, a senior medical expert said.
Meanwhile, IHS Markit’s survey showed economic activity in the euro zone contracted more sharply than thought at the end of 2020 and could get worse as renewed lockdowns hit the bloc’s dominant service industry.
In company news, French artificial heart maker Carmat gained 5.3% after it said it was preparing to start selling its products in the second quarter of this year.
British baker and fast-food retailer Greggs jumped 6.7% as it slowed sales decline caused by the coronavirus crisis in the fourth quarter.