Connect with us


European stocks end flat as industrial losses offset commodity gains

European stocks end flat as industrial losses offset commodity gains 1

By Anisha Sircar and Ambar Warrick

(Reuters) -European stocks closed flat on Monday, as gains in banks and commodity-linked sectors were offset by losses in industrial stocks on rising bond yields, and as the outlook for the telecom sector deteriorated.

The pan-European STOXX 600 closed largely unchanged at 472.21 points, with concerns over rising inflation and slowing economic growth also weighing on sentiment.

Mining and energy stocks rose 1.8% and 1.0%, respectively, boosted by oil prices at multi-year highs and a rebound in copper prices as a drop in Chinese inventories fuelled expectations of more buying. [O/R] [MET/L]

“The market has been worried about the risk of stagflation for the past few weeks. And every time you get to see oil prices going up, that’s when the market starts to worry that stagflation risk is coming back,” said Andrea Cicione, head of strategy at TS Lombard.

Rising bond yields, driven by expectations of monetary policy tightening in the U.S. and Britain, benefited bank stocks, with the sector rising 0.8% to a more-than two-year high. [GVD/EUR]

HSBC Holdings gained 1.9% as concerns about pandemic-related bad loans were replaced by a surprise 74% rise in the British bank‘s third-quarter profit and $2 billion buyback announcement.

But rising yields weighed on industrials and utilities, as they made future returns from the sectors, which are largely dividend-linked, appear less attractive.

Planemaker Airbus fell 1.6% on rebuffing calls to temper plans almost double production of its best-selling A320 jet family.

Telecom stocks sank 0.9% after BofA Global Research reinstated “underperform” ratings on Nokia and Ericsson on low earnings expectations, and signs that the 5G market had peaked.

The STOXX 600 finished at over six-week highs last week, buoyed by optimism about the earnings season. The focus turns to major earnings reports this week, as well as a European Central Bank meeting.

Of the 18% of STOXX 600 companies that have issued third-quarter reports so far, 63% topped analysts’ profit estimates, as per Refinitiv I/B/E/S data. About 52% beat estimates in a typical quarter.

UniCredit slipped 1.7% after the Italian government and the bank ended talks over the sale of ailing Tuscan bank Monte dei Paschi di Siena (MPS).

Monte dei Paschi di Siena (MPS) slid 2.4%.

Spain’s Sabadell rose 2.8% after it said its board had rejected an offer from Co-operative Bank for its British subsidiary TSB.

(Reporting by Anisha Sircar in Bengaluru; editing by Uttaresh.V and Barbara Lewis)

Editorial & Advertiser disclosure
Our website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.
Global Banking and Finance Review Awards Nominations 2021
2021 Awards now open. Click Here to Nominate


Newsletters with Secrets & Analysis. Subscribe Now