MILAN/FRANKFURT: European shares hovered near one-year highs on Tuesday as investors bet a bumper US stimulus package will power global economic growth this year, while Glencore led a rally among mining stocks after reinstating its dividend.
The pan-European STOXX 600 was up 0.2% after jumping 1.3% in the previous session to its highest level since February 2020.
A 3.8% rise in shares of Glencore helped the European mining index climb to a near 10-year high, while energy stocks were lifted by stronger oil prices.
The UK’s FTSE 100 led gains among regional bourses, with financial stocks jumping on hopes that a swift roll-out of COVID-19 vaccines would lift the economy out of a deep pandemic-induced slump.
Germany’s DAX, on the other hand, was flat ahead of data that is likely to show investor sentiment remained tepid in February.
The benchmark STOXX 600 is on course to log its third monthly gain in four as investors pile into sectors such as mining, energy, banks and industrial goods, which underperformed the broader market last year following a coronavirus-driven crash in March.
Investor focus later in the day will be on a flash reading of the euro zone’s fourth-quarter GDP estimate, with economists in a Reuters poll expecting the economy to have contracted 5.1% year-on-year.
Meanwhile, a better-than-expected quarterly European earnings scorecard has raised expectations of a swifter business recovery this year.
Analysts now expect fourth-quarter earnings for STOXX 600 companies to have dropped 18.2%, compared with an estimate of 26.8% on Jan. 1, according to Refinitiv data. Earnings are expected to rebound by 41% in the first quarter of 2021.
Miner BHP Group rose about 1% after posting its best first-half profit in seven years and declaring a record interim dividend, while Swiss dental implant maker Straumann jumped 2.9% on reporting higher quarterly organic revenue.—Reuters
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