European stocks rise to near 1-year high on commodity gains

European shares ended at a near one-year high on Monday as major resource stocks benefited from expectations of a swift economic recovery, while Vivendi led gains on its planned capital distribution from Universal Music.

Reuters | Updated: 15-02-2021 22:42 IST | Created: 15-02-2021 22:42 IST
European stocks rise to near 1-year high on commodity gains

European shares ended at a near one-year high on Monday as major resource stocks benefited from expectations of a swift economic recovery, while Vivendi led gains on its planned capital distribution from Universal Music. The pan-European STOXX 600 rose 1.3% to its highest since late February 2020, with Rio Tinto, BHP Group and Anglo American bolstering the index as copper prices leapt to a more than eight-year high.

Banks and energy stocks also climbed as a so-called "recovery trade" sparked demand for sectors that had underperformed the broader index following early 2020's coronavirus-driven crash. Metal and oil prices rose as investors bet on fresh U.S. stimulus and major vaccine programs spurring a resurgence in commodity demand.

Vivendi SE topped the STOXX 600 with a 19.6% jump after the French conglomerate said it intended to distribute 60% of Universal Music's capital to investors. Shares of Groupe Bollore, which has a 27% stake in Vivendi, jumped 14.6%.

Anticipation of more U.S. stimulus measures was bolstered after President Joe Biden on Friday turned to a bipartisan group of local officials for help on his $1.9 trillion coronavirus relief plan. Historic monetary and fiscal stimulus has helped the benchmark STOXX 600 rebound about 55% since slumping to a more than seven-year low in March 2020, although it has lagged the U.S. S&P 500 due to prolonged lockdowns in Europe.

A recent Reuters poll found the euro zone economy was in a double-dip recession and that economists now expect GDP to contract 0.8% in the first quarter, reversing an earlier forecast for growth of 0.6%. Adding to doubts over a euro zone recovery, data showed industrial production shrank more that expected in December under the weight of falling output of capital and non-durable consumer goods, confirming an economic contraction in the fourth quarter.

However, analysts said a global economic recovery was set to benefit euro zone sectors that were exposed to trade. "New orders for manufacturing continue to grow quickly and the rest of the world continues to recover, which bodes well for the start of 1Q in terms of exports and production," ING analysts wrote in a note.

"This makes manufacturing the bright spot in an otherwise downbeat short-term outlook." Trading volumes were thin for the day, with markets in China, Hong Kong and the United States shut for local holidays.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


TRENDING

OPINION / BLOG / INTERVIEW

Viral variants and vaccine nationalism pose two-pronged threat to Covid victory

... ...

Tracking Fintech during COVID-19: Harnessing power of technology

Its abundantly clear now that as fintech cements its place in the financial sector, accelerated further by the COVID-19 pandemic, it could open the sector to new possibilities by harnessing the power of technology to deliver financial ...

Tectonic turns: How technology shaped healthcare over the decades

Tracing an episodic evolution, with technology at the interface of human and his health....

World Water Day sees crises of inequality in countries both rich and poor

... ...

Videos

Latest News

U.S. condemns sentencing of tycoon Jimmy Lai, other Hong Kong activists

The United States on Friday condemned the sentencing of Hong Kong media tycoon Jimmy Lai and other pro-democracy activists on what it called politically motivated charges. Beijing and Hong Kong authorities are targeting Hong Kongers for doi...

'NASA rules," Musk says as SpaceX wins $2.9 billion moon lander contract

NASA awarded billionaire entrepreneur Elon Musks space company SpaceX a 2.9 billion contract to build a spacecraft to bring astronauts to the moon as early as 2024, the agency said on Friday, picking it over Jeff Bezos Blue Origin and defen...

UN agrees to deploy cease-fire monitors in Libya

International monitors will watch over a nearly six-month-old cease-fire agreement in Libya, the U.N. Security Council decided in a vote announced Friday, as the country heads toward December elections after a decade of fighting and upheava...

Chilean mining city of Calama rocked by blast at explosives factory

A large blast rocked the northern Chilean mining city of Calama on Friday afternoon after what local officials said was a nitroglycerine explosion at a plant run by Enaex, a company that produces explosives for the mining industry.The explo...

Give Feedback