European stocks on front foot Monday 08:00 BST. European stocks are opening on the front foot after a choppy Asian session dominated by Japan's election result. Gold is rallying as the dollar weakens and Treasury yields inch lower, in a market where bullish sentiment is underpinned by another record close for Wall Street. US index futures suggest the S&P 500 will add another 3 points, leaving the most-followed stock index just 4 points shy of trading above 1,700 for the first time. The benchmark has been buoyed of late by investors coming to terms with the prospects of the US Federal Reserve perhaps later this year reducing quantitative easing - an $85bn-a-month bond purchase programme deemed by many as an important support of assets worldwide. Sentiment is also being buttressed by a generally well-received second quarter corporate earnings season. Companies stepping up to the plate this week include Apple, Texas Instruments, ConocoPhillips and Amazon. The FTSE Eurofirst 300 is starting the week with a gain of 0.2 per cent, also helped perhaps by an easing of eurozone debt fears after Portugal's president said the governing coalition should remain in power to ensure the country's bailout remained on track. The euro is up 6 pips to $1.3148 and the implied borrowing costs of Lisbon's 10-year bonds are down 5 basis points to 6.79 per cent. In other forex action, much attention has focused on the Japanese yen as investors parsed the outcome of the country's election. Prime Minister Shinzo Abe's Liberal Democratic Party won a sweeping victory in the upper house on Sunday, offering the equity market some relief from recent political uncertainty. Japanese equities jumped more than 1 per cent in early trading but a strengthening of the yen weighed on exporters and the benchmark Nikkei 225 index relapsed to end the morning session flat. The yen has held much of its gains - currently 0.5 per cent firmer at Y100.13 - but the Nikkei has shrugged that off to close up 0.5 per cent. Economists at Nomura said the most significant impact of the elections was that the Diet, the upper house, was no longer divided, clearing a key hindrance to the legislative process. "The split Diet had in many cases been responsible for holding up policy decisions in Japan, and we think the ending of this situation should make it easier for the government to push ahead with Abenomics and its growth strategies," the Japanese bank said in a note to clients. Part of that strategy is monetary largesse from the Bank of Japan, and indeed BoJ board member Takehiro Sato said on Monday that the central bank still has options left to boost demand. Such talk of possible further central bank liquidity is music to the ears of gold bugs, and the bullion is up $21 to $1,317 an ounce, helped also by the dollar index easing 0.1 per cent as 10-year Treasury yields ease 2 basis points to 2.47 per cent. Elsewhere in Asia, Chinese stocks were more circumspect. The Shanghai Composite rose 0.3 per cent but Hong Kong's Hang Seng has dipped 0.1 per cent as investors reacted to Friday's news that the People's Bank of China had liberalised lending rates, including a move to abandon the decades-old lending floor on the discount Chinese banks can offer for commercial interest rates. This was seen as another signal that the government could push ahead with pro-market reforms. Meanwhile, Australia's ASX 200 climbed 0.6 per cent to a two-month high, led by mining stocks in response to a jump in the price of gold.