(Reuters) – European stocks bounced on Monday after sharp losses last week as a selloff in bond markets eased, while optimism over COVID-19 vaccination programme and U.S. stimulus package further aided sentiment.

The pan-regional STOXX 600 index rose 1.6% by 0811 GMT following strong gains in Asian stocks despite weaker-than-expected manufacturing activity data out of China.

The European equities benchmark fell to a near one-month low on Friday as investors grew fearful that rising inflation due to another large U.S. stimulus package and the re-opening of the global economy could drive major central banks to tighten monetary policy.

The German DAX rose 1.3%, while France’s CAC 40 and UK’s FTSE 100 gained 1.5% each.

Miners, up 2.2%, were the top sectoral gainers, while travel & leisure and retail stocks jumped over 2%.

British Airways-owner IAG was the top gainer on STOXX 600, jumping 5.4% after Peel Hunt upgraded the stock to “buy” on expectations of a rebound in travel demand during summer.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva)