(Reuters) -European stocks rose on Monday, with oil, banks and utility shares driving gains as investors hoped that a strong euro zone economic recovery would outweigh risks from a global slowdown.
The pan-European STOXX 600 index was up 0.4% after hitting a three-week low last week. Asian stocks, however, fell following news of fresh regulatory crackdown on Chinese firms. [MKTS/GLOB]
Global stocks have come under pressure recently after months-long gains on worries about inflation, tighter COVID-19 curbs in Asian economies, China’s regulatory moves, and growing views that central banks will soon start paring stimulus.
While those concerns remain, European investors took comfort as the European Central Bank last week raised its growth and inflation projections for this year and beyond, as the euro zone economy recovers quicker than expected from the pandemic shock.
Economy-sensitive sectors, including banks, oil and gas, and construction and materials, rose between 1% and 1.3%, while utilities climbed 1.2%.
“Regionally, we maintain our preference for non-U.S. markets, where there is scope for catch-up,” Daniel Grosvenor, director of equity strategy at Oxford Economics said in a note.
“European markets and Japan appear particularly well-placed as their valuations remain relatively depressed and their EPS momentum continues to improve at a time when the U.S. looks to have peaked.”
All eyes will be on the U.S. consumer prices data on Tuesday after soaring producer prices on Friday raised doubts around the U.S. Federal Reserve’s view that inflation is transitory.
Meanwhile, a September market sentiment survey published by Deutsche Bank showed an equity market correction of 5%-10% by the end of the year was the overwhelming consensus.
Among individual stocks, German online pet supplies’ retailer Zooplus AG jumped 8.2% after Hellman & Friedman raised its takeover offer to 3.29 billion euros ($3.89 billion) from an initial offer of 3 billion euros.
Associated British Foods dropped 3.7% as fourth-quarter sales at its Primark fashion business were lower than expected, with shopper numbers hurt by public health measures in its major markets.
Valneva plunged 32.9% after the British government ended a COVID-19 vaccine supply deal with the French company, alleging a breach of obligations that Valneva denies.
Reporting by Sruthi Shankar in Bengaluru; Editing by Sherry Jacob-Phillips and Uttaresh.V
Source: Reuters