FRANKFURT, June 8 ― European stocks hit record highs yesterday as another run of gains in automakers more than offset early declines in commodity-linked shares sparked by downbeat China export data.
The European automobiles and parts index rose 0.9 per cent to reach its highest since March 2015, extending a 5.3 per cent rally from last week.
The continent-wide STOXX 600 index added 0.2 per cent, with global investors now eyeing a European Central Bank meeting later this week.
Euro zone banks were broadly higher as government yields were steady near one-month lows ahead of the ECB meeting on Thursday when policymakers are expected to stick to their dovish policy stance.
“We expect the ECB to maintain its current pace of asset purchases even as the economic restart gains traction,” strategists at BlackRock wrote in a client note.
“We wouldn't view a decision to slow purchases as a hawkish policy signal, as the ECB is focused on keeping financing conditions easy. This, and a Federal Reserve that we see keeping policy easy, provides a positive backdrop for risk assets including European equities.”
Miners fell 1.6 per cent as copper prices dipped after a slower-than-forecast growth in Chinese exports sparked concerns about weakening demand for the red metal.
Oil and gas stocks declined 0.3 per cent as crude prices pulled back ahead of talks this week between Iran and world powers over a nuclear deal that, if clinched, is expected to boost crude supplies.
Global stocks have been pinned near life highs as major economies reopen from coronavirus lockdowns, but concerns that the economic recovery may not be as fast as thought, and signs of quickening inflation, have slowed the pace of gains.
Data showed German industrial orders dropped unexpectedly in April on falling domestic demand as supply chain disruptions held back manufacturers.
“What is important is the fact that they are all temporary and that the rebound in German industry is set to continue, only not necessarily following a straight line,” Carsten Brzeski, global head of macro at Dutch bank ING, wrote in a note.
Italian lender Unicredit jumped 3.5 per cent after Jefferies upgraded the stock to “buy” from “hold”.
French vouchers and cards provider Edenred rose 3.6 per cent after Deutsche Bank upgraded the stock to “buy”.
British-listed miner Anglo American fell 2.7 per cent after it completed the spin-off of its Thungela thermal coal business. ― Reuters