European shares rallied on Monday, underpinned by stronger banking stocks, as news that Hillary Clinton would not face charges over her use of e-mails gave her bid for the White House fresh momentum just before the November 8 vote.
By 0922 GMT, the STOXX 600 was up 1.4 per cent. Last week the pan-European index made its biggest weekly loss since February on growing uncertainty over the US vote outcome.
But Clinton got a fresh boost over Republican rival Donald Trump after the FBI had said on Sunday it stood by its earlier finding that no criminal charges were warranted.
“With this result being seen as a positive for her chances of winning tomorrow's election, the market has opened with a risk-on tone,” Rabobank analysts wrote in a note.
While no sector was trading in the red, banks led the gainers, helped by a more than 4 per cent surge in HSBC . The emerging markets-focused bank had posted a sharp jump in its core capital, bolstering the outlook for near-term dividend payments.
“The key feature of the numbers is the reported CT1 (core tier 1 ratio) of 13.9 per cent and leverage ratio of 5.4 per cent, substantially ahead of expectations and management’s target," said UBS, which rates the stock as “neutral’’.
Italy’s Intesa, BNP Paribas and Deutsche Bank rose between 2.6 per cent and 3.4 per cent. Analysts had said banks would suffer in particular by any policy uncertainty created by a Trump presidency.
Ryanair, up 5.6 per cent, was another gainer after a well-received earnings update. Europe’s largest carrier by passengers cut its annual profit forecast due to a weaker pound, but said it expected to boost its market share in the coming months by selling more tickets at cheaper prices.
The top STOXX gainer was PostNL, gaining 5.8 per cent, after the Dutch postal company rebuffed a raised takeover offer from Belgian rival Bpost, saying it wished to remain an independent group.
Among top losers were Zalando, which fell more than 2 per cent following a two-notch downgraded to “sell” from UBS, and precious metals miners Fresnillo and Randgold , which were supported last week as investors sought safe haven assets due to concerns over the U.S. vote's outcome.
Analysts at Deutsche Bank said a Clinton victory could lift Europe’s STOXX index by around 5 per cent, while uncertainty linked to a Trump win could see it fall 5-10 per cent.