European Stocks Rise With FTSE 100 At Record As Commodities Lead
European equities rose as trading resumed following a holiday, with gains led by miners and energy stocks. Investors were focused on the path of interest rates after US manufacturing data on Monday.
(Bloomberg) -- European equities rose as trading resumed following a holiday, with the UK’s FTSE 100 heading for a record-high close as commodity stocks rallied.
The Stoxx Europe 600 gained 0.4% by 9:20 a.m. in London, while the FTSE 100 climbed 0.7%.
Energy shares like Shell Plc and BP Plc outperformed as oil advanced, with heightened geopolitical risks in the Middle East and tighter supply from Mexico helping to buoy prices. Miners also rose, with the likes of Glencore Plc and Rio Tinto Plc heading higher. Among other individual movers, BE Semiconductor Industries NV jumped after an upgrade from analysts at Barclays Plc.
Bond traders priced in less monetary-policy easing by the Federal Reserve this year after a gauge of US manufacturing activity showed expansion for the first time since 2022. Meanwhile, Fed Chair Jerome Powell on Friday said the US central bank isn’t in any rush to cut interest rates as policymakers await more evidence that inflation is contained.
European stocks just marked their best quarter in a year as traders remained optimistic about the economy and that interest rates would come down soon. The spotlight is turning to corporate earnings to drive the next leg of the rally in the region’s shares. Analysts expect profits to rebound 4% in 2024 after slumping last year, according to data compiled by Bloomberg Intelligence.
“We remain bullish for the rest of 2024, mainly because leading indicators and lower rates point to an economic recovery in the second half,” said Susana Cruz, a strategist at Liberum. “Although the re-rating has started for some cyclical sectors, analyst earnings-per-share estimates do not reflect the improved outlook yet, so there’s still value in sectors such as construction.”
For more on equity markets:
- Earnings Are Next Test for Europe’s Record Rally: Taking Stock
- M&A Watch Europe: Aluflexpack, Dala Energi AB, Virgin Money, UBS
- US Stock Futures Little Changed; PVH Falls
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--With assistance from Sagarika Jaisinghani and Michael Msika.
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