EURO STOXX 50

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European stocks snap 4-day losing streak as oil, banks rise

09/13/2021 | 11:57am

(Reuters) -European stocks ended higher for the first time in five days on Monday, as oil, banks and utility shares gained on hopes that a strong euro zone economic recovery would outweigh risks from a global slowdown.

The pan-European STOXX 600 index was up 0.3% 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.

"While we are used to seeing US markets lead the way, there is a feeling that we could see greater catch-up for Europe as high vaccination levels keep deaths relatively stable," said Joshua Mahony, senior market analyst at IG.

Economy-sensitive sectors, including banks, oil and gas, and construction and materials, rose between 0.9% and 2.8%, while utilities climbed 1.6%.

All eyes will be on the U.S. consumer prices data on Tuesday after soaring producer prices last week raised doubts about the U.S. Federal Reserve's view that inflation is transitory.

"Some central bankers will have you believe they are happy to hold back on tightening for now, we are seeing very clear signs that this spike in inflation is far from fleeting," IG's Mahony said.

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 9.0% 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 2.4% 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 41.6% 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 and Shreyashi Sanyal in Bengaluru; Editing by Sherry Jacob-Phillips, Uttaresh.V, William Maclean)

By Sruthi Shankar and Shreyashi Sanyal

© Reuters 2021
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