European stocks advanced amid optimism about U.S. economic strength and as banking shares climbed following a report that Italian bank UniCredit is considering a merger with France’s Societe Generale.
The Stoxx Europe 600 Index gained 0.6%, after falling 1.1% last week. UniCredit jumped 2.9% and SocGen rose 2.6%. SocGen denied “any board discussion regarding a potential merger with UniCredit,” in an email to Bloomberg on Monday. Morgan Stanley said in a note that it sees opportunities in Italian and Spanish banks after the recent selloff.