European stock markets rose on Monday and oil prices climbed to their highest in more than a month as a loosening of coronavirus shutdowns boosted market sentiment, even as the deadly outbreak has yet to be fully contained.

Warm weather is enticing much of the world to emerge from coronavirus lockdowns as centres of the outbreak from New York to Italy and Spain gradually lift restrictions that have kept millions cooped up for months.

However, the weekend also saw anti-lockdown protestors in countries such as the United States, Germany, England and Poland arguing the government restrictions demolish personal liberties and are wrecking economies.

Governments must balance the economic incentive to reopen businesses and allow people to go out and about with the risk of triggering a deadly second wave of the virus, which has killed more than 300,000 people and spread to at least 210 countries.

“It does feel like we’re in the middle of a phoney war at the moment with all of us waiting to see how efficiently the various economies are able to reopen given all the social distancing that will be required,” said Jim Reid, a Deutsche Bank strategist.

The pan-European STOXX 600 was up 1.9 per cent at 0810 GMT, with heavyweight bourses in Britain, Germany and France all comfortably in positive territory.

There were still lots of obstacles to a rapid recovery, however, with US Federal Reserve Chairman Jerome Powell saying in an interview on Sunday that a US economic recovery may stretch deep into 2021.

The most important data for the US economy now are the “medical metrics” around the coronavirus pandemic, he said.

Already rocky US-China relations also saw tensions increase over the weekend, as the United States raised threats over telecoms equipment giant Huawei Technologies and China’s treatment of journalists in Hong Kong.

US lawmakers and officials are crafting proposals to push American companies to move operations or key suppliers out of China that include tax breaks, new rules, and carefully structured subsidies.

Japan’s preliminary GDP data showed that the world’s third biggest economy contracted an annualised 3.4pc in the first quarter, slipping into a recession for the first time in more than five years.

But hopes of a worldwide economic recovery saw oil prices climb by more than $1 a barrel on Monday, supported by output cuts.

Brent crude reached as much as $33.98 a barrel on Monday, its highest since April 13, and was last up 3.9pc at $33.72. US West Texas Intermediate crude was up 5.4pc at $31.03 a barrel, having reached a two-month high earlier in the session.

In commodity markets, the flood of liquidity from central banks, combined with record-low interest rates and poor economic data from the US lifted gold to a seven-year peak.

The metal was last up 1.2pc at $1,762 an ounce, with silver and palladium also boosted.

The MSCI world equity index, which tracks shares in 49 countries, was up around 0.4pc while MSCI’s main European Index .MSER was up 2pc.

Government bond yields edged higher across the euro area, while French bonds saw some underperformance after its ratings outlook was lowered by Fitch Ratings.

Europe’s biggest budget airline, Ryanair, reported a 13pc rise in profit for the year to March 31, but cut its annual passenger traffic target by a further 20pc and said it had “no visibility” on customer demand once it reopens much of its network on July 1. Ryanair shares were last up 6.9pc.

The dollar fell slightly against a basket of six major currencies.

The Norwegian crown was lifted by the rising oil prices, up around 0.7pc versus the euro.

Sterling fell below $1.21 — its lowest since March 26 — late on Sunday after the Bank of England’s chief economist said the bank is looking more urgently at options such as negative interest rates.