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Europe's top stock markets rose Monday as investors eyed a record tech-driven rally on Wall Street before the weekend and set aside a mixed Asian performance.
Oil prices clawed back some of their recent losses that had been sparked by simmering Middle East tensions and after the International Energy Agency slashed its demand growth forecast.
The dollar firmed against the euro but weakened versus the yen as dealers mulled the US interest rate outlook.
"European indices are pushing higher... as optimism over the direction of US earnings provide a tailwind behind tech stocks in particular," noted Joshua Mahony, chief market analyst at trading firm Scope Markets.
Asian equities diverged on Monday, despite Friday's record finish on Wall Street, as hopes for an early US interest rate cut were dealt a fresh blow by Federal Reserve officials looking to rein in investor expectations.
A surge in tech titans including Apple, Amazon, Nvidia and Facebook parent Meta on Friday pushed New York's S&P 500 index to its first new all-time high since early 2022 thanks to bets on lower borrowing costs this year.
The rally was helped by a closely watched survey from the University of Michigan showing a surge in consumer confidence and optimism about falling inflation.
However, analysts warned that traders may have run a little ahead of themselves at the end of last year as they forecast the Fed will cut rates up to six times before December, with the first coming in March.
A string of data in recent weeks has shown inflation remains sticky and well above the bank's two percent target, while the jobs market continues to show resilience despite borrowing costs sitting at two-decade highs.
Minutes from the Fed's most recent meeting also showed decision-makers were happy to keep monetary policy tight until they are confident prices are under control.
On Friday, San Francisco Fed boss Mary Daly said it was likely too early to think of moving just yet.
Atlanta Fed chief Raphael Bostic said that while he was open to changing his mind, he did not expect a tweak until the third quarter, while his Chicago counterpart Austan Goolsbee added that decision-making was "fundamentally about the data".
The chances of a reduction before the end of the first quarter fell last week to less than 50 percent, having been above 80 percent the week before, Bloomberg News reported.
Back in Asia, Tokyo was the main winner again, extending its blockbuster start to the year thanks to a weaker yen and rising Japanese inflation. Traders are awaiting a Bank of Japan policy decision later in the week. Sydney, Taipei, Manila and Wellington also rose.
On the downside, Shanghai and Hong Kong continued their painful start to the year caused by ongoing weakness in China's economy and a lack of measures aimed at kickstarting growth.
- Key figures around 1140 GMT -
London - FTSE 100: UP 0.2 percent at 7,474.51 points
Paris - CAC 40: UP 0.5 percent at 7,405.35
Frankfurt - DAX: UP 0.5 percent at 16,632.83
EURO STOXX 50: UP 0.5 percent at 4,471.91
Tokyo - Nikkei 225: UP 1.6 percent at 36,546.95 (close)
Hong Kong - Hang Seng Index: DOWN 2.3 percent at 14,961.18 (close)
Shanghai - Composite: DOWN 2.7 percent at 2,756.34 (close)
New York - Dow: UP 1.1 percent at 37,863.80 points (close)
Euro/dollar: DOWN at $1.0895 from $1.0898 on Friday
Dollar/yen: DOWN at 148.05 yen from 148.12 yen
Pound/dollar: UP at $1.2705 from $1.2703
Euro/pound: DOWN at 85.74 pence from 85.78 pence
West Texas Intermediate: UP 0.2 percent at $73.57 per barrel
Brent North Sea Crude: UP 0.1 percent at $78.67 per barrel
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F.Garcia--TFWP