FRANKFURT, June 3 ― European stocks stayed near record levels yesterday, helped by energy and consumer stocks, while strong economic data from the United States and Europe buoyed investor sentiment in a mostly quiet day of trading.
The pan-European STOXX 600 index traded 0.3 per cent higher, holding just below its all-time high hit in the previous session.
Data showing a strong expansion in US and European factory activity in May lifted world shares to fresh highs on Tuesday, with investors awaiting US jobs data tomorrow for confirmation of a solid recovery in the world's largest economy.
Oil and gas stocks rose 0.9 per cent to lead sectoral gains in Europe as crude prices extended gains after Opec and its allies stuck to their plan to cautiously bring back supply to the markets in June and July.
Stocks considered more stable at times of market uncertainty ― such as food and beverage and real estate ― also found favour, while tech and miners gained.
“Markets are making steady progress this afternoon, although a lack of macro drivers have left things a little dull,” said Chris Beauchamp, chief market analyst at IG.
“But overall indices remain in solid form, and have started June on the right foot after holding their ground in a less-than-exciting May.”
Worries about rising inflation triggered a bout of volatility in markets in May. However, investors have taken comfort from reassurances from the US Federal Reserve and European Central Bank policymakers about the price rise being transitory.
“Central banks face a balancing act in preparing markets for an unwinding of emergency measures. We expect this to happen in a controlled fashion over the summer, though we acknowledge the risk of communication accidents amid overheating concerns in the US,” analysts at Generali Investments said in a note.
Data on Tuesday showed euro zone inflation accelerated to 2 per cent in May from 1.6 per cent in April, driven by higher energy costs to above the ECB's aim of “below but close to 2 per cent”.
Swedish truckmaker Volvo rose 3.5 per cent as its board proposed that the proceeds from the sale of UD Trucks be distributed to shareholders.
Danish luxury TV and stereo maker Bang & Olufsen jumped 9.6 per cent after providing an upbeat full-year earnings forecast.
German broadcaster ProsiebenSat.1 Media slipped 4.2 per cent after Chief Executive Officer Rainer Beaujean said it “does not need any help from outside” amid calls to consolidate the European broadcasting industry. ― Reuters