LONDON: European stocks edged up on Monday, helped by gains in major mining and oil company shares following weakness in the dollar prompted by Friday's weak US jobs data.
The pan-European STOXX 600 and FTSEurofirst 300 equity indexes rose 0.3 and 0.4 percent respectively, having fallen around 1 percent on Friday. European shares were led up by Britain's FTSE 100, which rose 1 percent and is heavily weighted in commodity-related shares.
The U.S jobs data hit the dollar, but this in turn gave a lift to the commodity sector, since a weaker greenback makes commodities priced in that currency more affordable for consumers paying with other currencies.
The STOXX Europe 600 Basic Resources sector rose 4.3 percent, boosted by a rise for miners. Mining stocks such as Anglo American, Rio Tinto and BHP Billiton rose more than 6 percent as the price of copper climbed to its highest level in around four weeks.
"Commodity stocks are continuing to benefit from Friday's sharp drop in the US dollar," Jasper Lawler, market analyst at CMC Markets, said.
The shares of oil majors such as BP and Total also rose as oil prices advanced. However, shares in airlines Air France KLM, Lufthansa and International Consolidated Airlines Group all fell after analysts at Barclays cut their price targets on the stocks.
"Even if their margins are still rising thanks to fuel savings, many airlines across the globe would admit that demand is softer than anticipated," Barclays wrote in a note.
Travel and leisure stocks dropped 0.4 percent, the biggest sectoral faller.
Persistent concerns that Britain will vote to leave the European Union in a referendum on June 23 also kept investors on edge.
A series of polls showed that the 'Out' campaign was gaining momentum, with YouGov and ICM polls giving it a 4-5 point lead.
That put pressure on the pound but also hit certain UK-listed stocks with exposure to the domestic economy.
Housebuilders such as Berkeley, Persimmon and Barratt Developments are expected to be some of the stocks most affected by any British exit from the EU, or Brexit, and were down 0.5-1.5 percent.
Comments
Comments are closed for this article.