* Pan-European STOXX 600 index ends 1.2% higher
* Demand for safe-haven bonds falls back
* Norwegian Air up on stake sale in banking company
* Greene King shares jump on buyout offer
(Adds details, comments, updates prices to close)
By Agamoni Ghosh
Aug 19 (Reuters) - European shares ended higher for a second
straight session on Monday on signs that measures would be
adopted to prop up growth in major economies, while bond yields
rebounded amid improved global sentiment plagued by recession
worries.
The pan-European STOXX 600 index .STOXX , hammered since
the start of August by worries of a possible global slowdown,
ended 1.2% higher, with Frankfurt shares .GDAXI up 1.3%,
recovering from last week's six-month low.
Friday's report that Germany's coalition government may
ditch its balanced budget rule to take on new debt and launch
stimulus continued to help sentiment. Finance Minister Olaf
Scholz said the country possessed the fiscal strength to counter
any future economic crisis "with full force." "It's a continuation of what we saw on Friday, the hope that
their government will step in to provide fiscal stimulus to
boost growth in the economy," said Carsten Brzeski, chief
economist, Germany at ING. "Because news like that is a game
changer."
The moves from Berlin come on the back of stalled growth
across Europe that has been led by a slowdown in the region's
largest economy, with the U.S.-China trade war, Brexit
uncertainty and Italy's political woes adding pressure.
RECESSION RISK
Longer-term bond yields in the euro zone as well as the
United States, whose slide below short-term rates last week set
off alarm bells about a possible recession, were off their
record low levels. "Its like we had a big storm and now there is a dry period
with some rays of sunshine which will encourage more
risk-taking, but it is still a highly volatile market," said
Brzeski.
China's central bank added to the stimulus cheer by
unveiling interest rate reforms targeted at lowering corporate
borrowing costs. The move comes after Beijing announced plans to
spur private consumption to shore up growth last week.
All Europe's stock market sectors ended the session in the
black. Oil stocks .SXEP chalked up their biggest daily gain
since January this year, benefiting from a rise in crude prices
due to an attack on Saudi oil installations in Yemen. O/R
Among individual stocks, Norwegian Air NWC.OL rose 4%
after agreeing to sell its stake in Norwegian Finans Holding
NOFI.OL for 2.22 billion crowns ($247 million) in an attempt
to boost the loss-making airline's finances. Greene King GNK.L shares jumped nearly 50% after a unit of
CK Asset Holdings Ltd 1113.HK agreed to buy the British pub
operator. Investors will be watching for minutes from the latest
policy meetings of both the U.S. Federal Reserve and the
European Central Bank later this week, along with global PMI
numbers, to further assess the health of the world economy.