European stocks bounce aided by the banking sector big gains

European shares rose on Monday morning in the first session of the week, recovering from a one-week low, the first gain in four sessions, and the banking sector was the biggest winner, amid news that Deutsche Bank agreed to merge talks with Commerzbank.

Dow Jones Stoxx Europe 50 rose by 0.2% as of 10:55 GMT, the index ended Friday's session down 0.8%, its third consecutive daily loss, reaching its lowest in nearly a week, as selling continues after the ECB's decisions.

The index was down 0.5% over last week's sessions, the first weekly loss in a month. The banking sector was the biggest loser after the European Bank President Mario Draghi announced a new round of "cheap" long-term loans to boost lending to the eurozone's banks and to stimulate the economy.

The ECB said that interest rates will remain at current levels at least until the end of this year, reducing its forecast for economic growth in the eurozone from 1.7% to 1.1% in 2019, and inflation expectations from 1.6% to 1.2%.

Stoxx Europe Index rose on Monday morning in its first session of the week, recovering from its lowest level in a week, achieving the first gain in the last four sessions, with most of the major markets and sectors in the positive region.

The banking sector led the gainers in Europe with a gain of more than 0.7%, offsetting part of last week's losses, after the news that Deutsche Bank agreed to merge talks with Commerzbank.

Germany's Commerzbank jumped more than 4% and Deutsche Bank rose 2% after an informed source reported that the Deutsche Bank AG board have agreed to hold talks with Commerzbank on the feasibility of the merger.

S&P 500 futures fell more than 0.2%, and the index ended Friday's session on Wall Street down 0.2%, the fifth consecutive daily loss.

Euro Stoxx 50 rose more than 0.2% , while in France, the CAC 40 index gained 0.2%. with Germany's DAX index adding 0.25%.

In London, the FTSE 100 rose 0.75% to top the gainers list in Europe ahead of the European Union finance ministers' meeting, which is expected to discuss the UK's exit from the EU just a day before the British parliament votes on the agreement with the EU.