Global stocks rally, with Italian banks, Nestle leading European markets higher

Global stocks moved higher Monday as gains in European banking shares and a stabilization in oil prices supported equity markets.

The Stoxx Europe 600 rose 0.8% after Asian markets broadly advanced. U.S. futures pointed to a 0.2% opening gain for the S&P 500.

Investors scooped up European banking stocks after Italian authorities said Sunday they were prepared to spend as much as EUR17 billion as part of the shutdown of two regional banks.

Italian banks have been a concern for years, weighed down by about EUR200 billion in bad loans, low profitability and insufficient capital. Their troubles have cast a shadow over the wider European banking system, which accounts for a large chunk of regional equity benchmarks.

"It is a very significant step," said Isabelle Mateos y Lago, chief multiasset strategist at BlackRock.

"If finally the issue of [bad loans in] the Italian banking system and overcapacity in some of the regional banks is being addressed, it is a very positive signal," she added.

The Stoxx Europe 600 Banks subindex was up 1.5% recently, while the FTSE Italia All-Share Banks rose 3.5%. Shares in Intesa Sanpaolo SpA, which is set to buy the best assets of two troubled Italian lenders for a token fee, rose 4.1%. Shares in Italy's largest lender, UniCredit SpA, also gained 3.6%.

Elsewhere in Europe, food and beverage shares logged strong gains following news that billionaire activist investor Daniel Loeb's Third Point hedge fund has taken a $3.5 billion stake in Nestlé SA. Shares in Nestlé were up around 4%.

Gains in oil prices also added to the positive tone in markets on Monday. U.S. oil prices entered a bear market last week after falling more than 20% since a recent February high. That slump came amid a persistent glut in crude prices despite moves to limit production from the Organization of the Petroleum Exporting Countries.

Brent crude oil, the international benchmark, rose 0.7% Monday to $45.87 a barrel. The Stoxx Europe 600 Oil and Gas subindex climbed 0.5%.

In early 2016, a sharp decline in oil prices pushed down major stock indexes as investors worried about the knock-on effects of rising defaults in the energy sector. The energy market is also crucial for the earnings recovery in the U.S., where the sector is expected to account for nearly half of the S&P 500's earnings growth in the second quarter, according to FactSet.

A "protracted shift" of oil prices to $40 a barrel or below during the second half of the year would be needed for central bank reserve managers and sovereign-wealth funds of oil exporting countries to become "significant sellers" of equities and bonds, strategists at J.P. Morgan Chase & Co. wrote in a recent note to clients. Such investors were an important driver of equity and corporate bond selling in 2015 and early 2016, the strategists said.

Gold prices slid as investors shunned havens and moved into riskier assets. Prices were recently down 1.2% at $1,242 an ounce. The Swiss franc and the Japanese yen, which tend to decline when riskier assets rally, were both lower against the dollar and the euro. Elsewhere in currency markets, the WSJ Dollar Index, which measures the dollar against a basket of 16 other currencies, was up 0.1% recently.

The yield on the 10-year Treasury note edged up to 2.159% from 2.146% on Friday. Yields rise as prices fall.

Investors are looking ahead to a raft of inflation data out of Europe and the U.S. this week. Signs that inflation has softened have pushed down bond yields in recent weeks.

"We think we're in a bit of a goldilocks environment," said Ms. Mateos y Lago, with strong economic growth and lukewarm inflation. That means central banks shouldn't rush to raise interest rates, she said.

"Frankly that is a great environment to be in risk assets globally," she added.

In Asia, the Shanghai Composite Index rose 0.9%, with Chinese stocks continuing to perform strongly following MSCI's decision to add them to its indexes. Gains there also helped boost Hong Kong equities on Monday. The Hang Seng Index rose 0.8%.

Meanwhile, Taiwan's tech-heavy Taiex index gained 1.3% to hit fresh 27-year highs.

In Japan, the Nikkei Stock Average rose 0.1%, with financial stocks weighing on the broader index. Signs that interest rates will remain low continue to weigh on Japanese financials, said Hisao Matsuura, chief strategist for equities at Nomura Japan.

Write to Christopher Whittall at christopher.whittall@wsj.com and Kenan Machado at kenan.machado@wsj.com