European markets have rallied on Tuesday, the final week of the year. Trading volumes are expected to remain light heading into the New Year holiday, and many traders have closed their books for the year. Exaggerating moves may be a result of the reduction of liquidity in the market, but European stocks have witnessed a strong rally on Tuesday as a result.
France’s CAC 40 index is up 72 points on the day, or 1.58%. Germany’s DAX 30 rallied in a similar fashion, up over 166 points, or 1.57%, on the day.
Crude oil futures for delivery in February are up to $36.98 in early morning trading in Europe, but are just one dollar higher than the 11-year low reached on December 22. Analysts are hopeful that the price of oil will rise to over $37 a barrel, which will allow European stocks to hold onto their gains.
Oil prices have dictated European markets in the past few months, and stabilizing oil prices will help Europe’s struggling markets stabilize.
Financial stocks experienced strong gains on the day, with BNP Paribas (EPA:BNP) up 0.97%, Germany’s Deutsche Bank (NYSE:DB) up 2.43%, and Societe Generale (EPA:GLE) up 1.73% on the day.
Volkswagen (ETR:VOW) rallied on the day, up over 1.36% as the company plans to reduce spending in 2016.