Morning MoneyBeat Europe: Stocks Gain as Oil Falls

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European stocks push higher Monday, rebounding after Friday's sharp losses, although investors will continue monitoring falling oil prices.

Early Monday, Brent crude oil prices fell to levels not seen since 2004 as a rebound in U.S. drilling activity reignited fears of an hefty global glut.

Last week, the industry group Baker Hughes reported that the U.S. oil-rig count had snapped a four-week decline to rise by 17 to 541. The increase in rigs in the second largest in more than a year. And with both members and nonmembers of the Organization of the Petroleum Exporting Countries continuing to engage in a battle for market share, oil prices are likely to continue to suffer.

Elsewhere, Spain's ruling Popular Party lost its parliamentary majority in elections on Sunday, leaving Prime Minister Mariano Rajoy struggling to avoid becoming the third European leader to be ousted this year after pushing through unpopular austerity policies.

The elections--which saw Spain's two establishment parties lose significant ground to two upstarts--produced a parliament so fragmented that the country will face major governing challenges as it tries to build on its recovery from a painful economic collapse.

U.S. stocks dropped sharply on Friday, sending the Dow to its lowest close since October as the Federal Reserve-inspired rally faded. In Asia early Monday, shares in Japan fell amid worries that the central bank will be reluctant to expand its easing program in the coming year, while in China, property and brokerage shares surged.

Watch for: U.K. CBI distributive trades, European consumer confidence.

Market Snapshot: At 08:55 GMT, FTSE 100 up 0.84%, CAC 40 up 0.64% and DAX up 1.49%. Nikkei closed Monday down 0.37%. Brent crude down 1.25% at $36.42. Gold up 0.60% at $1072.70. EUR/USD down at $1.0862. Ten-year Treasury yield higher at 2.21%, Bund yield higher at 0.55%, Gilt yield higher at 1.83%.

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