LONDON/MILAN: European stocks recovered on Monday after bond markets stabilized following a sharp selloff last week, while sentiment was boosted by heightened optimism over global COVID-19 vaccination programmes and a $1.9 trillion US stimulus package.

The pan-regional STOXX 600 index rose 1.7%, tracking strong gains in Asian markets, while data showed manufacturing activity picked up pace in major euro zone economies in February.

The German DAX rose 1.3%, while France’s CAC 40 was up 1.6% and UK’s FTSE 100 gained 1.9%.

Homebuilders such as Persimmon, Taylor Wimpey and Barratt Developments were the top gainers on the FTSE 100, gaining almost 5%. British Airways-owner IAG also jumped 5% after Peel Hunt upgraded the stock to “buy” on expectations of a rebound in travel demand during summer.

Miners, travel and leisure and retail sectors topped gains in Europe, up more than 2.3%. French food group Danone rose 2.5% after it said it was taking a first step toward selling its stake in its Chinese dairy partner Mengniu Dairy, and would use the gains to buy back its own shares.

Swiss-listed shares of computer goods maker Logitech International rose 1.5% after it raised its sales growth forecast to about 63% for fiscal 2021, up from the 57-60% range it previously expected.