The pan-European STOXX 600 rose Monday as a rally in British housebuilder stocks offset pressure from a jump in oil prices and elevated bond yields. UK housebuilders surged after the government said it would confirm a new equity loan programme for first-time buyers next month, while Brent crude climbed on renewed Middle East tension.
European shares climbed on Monday as a surge in British housebuilder stocks outweighed a jump in oil prices and persistently high bond yields. The pan-European STOXX 600 rose 0.48% to 641.73 points by 0829 GMT, with most major regional bourses trading higher.
UK housebuilders surge on new buyer support
British housebuilder stocks led the gains after the government said it would confirm a new equity loan programme for first-time buyers in next month's budget, reviving a policy meant to boost home ownership and support home construction. Shares of Persimmon, Barratt Redrow, Taylor Wimpey and Vistry rose between 13.5% and 15%. Britain's blue-chip FTSE 100 was up 0.58%.
Oil jump and mining losses cap the advance
Broader gains were restrained after Brent crude prices jumped 3% following US President Donald Trump's rejection of an Iranian proposal to reopen the Strait of Hormuz and end the conflict. Shares of European energy companies rose 0.6%, but miners slumped 1.7% as precious metals fell on a stronger dollar. Hochschild Mining, Fresnillo and Endeavour Mining were down between 4.8% and 6.3%.
Bond yields stay elevated as rate-hike bets build
Bond yields remained elevated, with the yield on Germany's 10-year government bond last marginally higher at 3.6303%, its highest level since June 2009. Central banks have responded to oil-driven inflation pressures with a round of rate hikes, with the European Central Bank raising rates for a second time this year.
As companies prepare to report quarterly earnings next month, investors are likely to demand stronger results to look past lingering geopolitical tensions. According to Investing.com: "The bar has been raised and the tolerance for disappointment is shrinking," said Daniela Hathorn, a senior market analyst at Capital.com. Investors will also watch speeches by ECB President Christine Lagarde and Bank of England Deputy Governor Dave Ramsden later in the day.
Among individual stocks, Danieli plunged 12% after missing annual earnings estimates, while Italy's Trevi rose 3.6% to a six-month high after construction peer ICOP raised its all-share takeover bid for the firm.
Source: Investing.com
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