Global stocks recover as worries about banks ease

Stock markets in Europe and Asia rose on Monday as investors put aside concern about euro zone banks and looked forward to corporate earnings and a raft of global economic events, including testimony from the head of the US Federal Reserve. Europe's biggest markets gained more than half a percent .FTEU3 and Portugal rallied by 1 per cent, after worries about a Portuguese bank last week caused the first sign this year of a return of nerves over Europe's southern half. MSCI's  broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.4 per cent, with Seoul .KS11 gaining 0.3 per cent. Japan's Nikkei .N225 bounced 0.9 per cent after several sessions of losses. European markets had calmed on Friday as investors decided that losses associated with the founding family of Banco Espirito Santo (BES.LS) were unlikely to disrupt Portugal's financial system or revive broader worries about the bloc's weaker economies. Suspicion remains that stocks and a number of other markets buoyed by the money the Fed has poured into the global economy are headed for a fall. But it may take a clearer sign that US interest rates are about to rise, tightening that ultra-loose monetary policy, to burst any bubble. While stock market investors had become more nervous and calls for a pullback in indices rose, he said, the drop on Monday in gold, the traditional safe haven, suggested the market was growing more optimistic. Gold reached a 16-week high last week. Portuguese bond yields fell by almost 10 basis points PT10YT=TWEB after BES, the country's biggest listed bank, took steps to reassure investors of its stability. Spanish, Italian and Greek bond yields also fell. European Central Bank President Mario Draghi will speak in the European Parliament later on Monday, according to Reuters.