European stocks jump on Fed slowdown hopes, Prosus slides on China woes

European shares rose on Monday, driven by hopes that the Federal Reserve could slow its pace of interest rate hikes, while investors braced for a busy week of earnings and a key interest rate decision from the European Central Bank.

The continent-wide STOXX 600 index rose 1.3 percent by 0708 GMT, with travel and leisure, retail and banking sectors leading the gains.

Wall Street’s main indexes rallied on Friday after a report said the Fed will likely debate on a smaller interest rate hike in December.

However, UK’s blue-chip FTSE 100 underperformed as the pound rose following news that Boris Johnson had withdrawn from the contest to become Britain’s next prime minister, likely paving way for Rishi Sunak to become the leader.

Meanwhile, Italian stocks rose 1.4 percent after Giorgia Meloni was sworn in as Italy’s first woman prime minister on Saturday.

Among single stocks, Philips gained 1 percent after the Dutch medical equipment maker said it expected to scrap about 4,000 jobs as it tried to streamline its organization.

Dutch technology investor Prosus lost about 10 percent , tracking weakness in Hong Kong tech giants, after Chinese President leader Xi Jinping’s newly unveiled leadership team heightened fears that economic growth will be sacrificed for ideology-driven policies.

Flash readings of euro zone and UK business activity for October are due later in the day.