(Reuters) – The European benchmark stock index edged up on Tuesday as a stable bond market gave equities some leeway, with major commodity-related stocks reversing their losses amid a reversal in market prices. petroleum and metals.
The pan-regional STOXX 600 index rose 0.2% after marking its best day in nearly four months on Monday, with mining stocks among the top gainers as copper prices stabilized near their highs of 10 years.
Oil stocks also reduced much of the day’s losses after oil prices stabilized ahead of an OPEC + meeting, where producers are expected to ease supply restrictions to feed growing demand on a gradual economic recovery.
European stocks pulled back from their one-year highs in February amid a spike in bond yields, with investors worried that a potential rise in inflation from global stimulus measures could spur central banks to tighten their monetary policy.
However, several European Central Bank officials said this week that the bank would prevent a premature increase in borrowing costs, including using the flexibility built into its bond purchase program.
“When we look at western markets, we don’t anticipate rate moves, which is why I’m comfortable with rising yields,” said Lewis Grant, senior portfolio manager at Federated Hermes in London.
“We have to recognize that returns are moving due to optimism about the reopening, and that’s a good thing for stocks.”
Eurozone inflation was also stable in February, marking a pause in what is expected to be a temporary but strong surge in consumer prices in the coming months as more economies reopen.
“Temporary factors are pushing the rate up right now … we expect high levels of inflation in 2021 to be largely transient and lower inflation to return in 2022,” analysts said. of ING.
Among individual movers, Swiss chocolate maker Lindt & Spruengli jumped 3.3% after saying it was aiming for organic sales growth of 6% to 8% this year thanks to pent-up demand after the pandemic hit its markets. activities.
German remote connectivity software company TeamViewer rose 4.2% after announcing it acquired Upskill, a US company specializing in augmented reality applications for frontline workers.
French yogurt maker Danone lost nearly 2% as investors questioned whether a recent split in his role as chairman and chief executive would give a new CEO some leeway.
HelloFresh hit the bottom of the STOXX 600 as the German meal kit delivery company said it expects most of its markets to normalize in 2021, following a boom in the previous year.
Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva and Lisa Shumaker