European Equity Benchmarks Close Higher; Mining, Airline Stocks Buoy Markets

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The broad-based major European indices closed higher in Monday trading as mining companies and airline stocks helped lift the markets.

In economic news, seasonally adjusted production in the construction sector increased 0.2% in the euro area (EA19) in June compared with May, and rose 0.6% in the EU28, according to first estimates from Eurostat, the statistical office of the European Union. In May, production in construction grew 0.3% in the euro area, and 1.2% in the EU28. Compared with June 2017, production in construction increased by 2.6% in the euro area and by 2.7% in the EU28.

The highest monthly increases in production in construction were reported in Hungary (+7.2%), Slovakia (+4.5%) and France (+3.8%), while the largest decreases were seen in Slovenia (-5.0%) and Germany (-3.2%). The highest annual increases in production in construction were in Hungary (+28.3%), Poland (+24.2%) and the Czech Republic (+8.9%), and the only decrease was reported in Bulgaria (-2.9%).

Meanwhile, UK households gave the least downbeat assessment of financial well being since January 2015, according to the IHS Markit Household Finance Index (HFI), which rose to 45.9 in August from 45.0 in July. The index, which measures households' overall perceptions of financial well being, registered the second-highest reading since the survey began in February 2009.

IHS Markit said the strain on household budgets continued to soften in August as a result of strong labor market conditions, survey-record income growth and slower declines in savings and cash available to spend. Despite households reporting a robust degree of positive sentiment toward current finances, the outlook toward financial well-being over the coming year slipped in the latest survey. At 46.0 in August, the index fell from the 28-month high of 51.7 recorded in July, indicating renewed pessimism toward future finances among UK households. The level of pessimism was the greatest since March 2017.

In Germany, the index of producer prices for industrial products rose 3.0% in July compared with the same month last year, according to the Federal Statistical Office (Destatis). In June the annual rate of change had also been 3.0%. Compared with June, the overall index rose 0.2% in July, after gaining 0.5% in May, and 0.3% in June.

In July, the price indices of all main industrial groups increased compared with July 2017. Energy prices were up 6.5%; prices of intermediate goods were up 3.2%; durable consumer goods rose 1.6%; and of capital goods gained 1.3%, while prices of non-durable consumer goods increased 0.4%. The overall index, excluding energy, was 1.9% up 0.1% compared with June.

And in Spain, business turnover registered a 0.6% monthly variation in June, after adjusting for seasonal and calendar effects, according to the Spanish Statistical Institute. The annual rate of the business turnover index stands at 6.8% in the series adjusted for the seasonal and calendar effects, and at 4.9% in the original series.

In equities, mining company Evraz and turnaround firm Melrose Industries led the FTSE higher in London, rising 2.8% and 2.6% respectively, followed by bookmaking company Paddy Power Betfair, which climbed 2.2%. Airline operators easyJet and International Consolidated Airlines were up 2.1% and 1.9% respectively, while mining companies Anglo American and BHP Billiton increased 1.3% and 1%.

In Frankfurt, pharmaceutical firm Bayer helped push the DAX sharply higher, rising 3%, followed by industrial gases company Linde, and chemical and consumer goods company Henkel, which were up 2.5% and 2.3% respectively. Industrial group Thyssenkrupp and chemicals company BASF were up 1.9% and 1.7%, while adhesives manufacturer Covestrol, and postal services provider Covestro increased 1.5%.

In Paris, mining company ArcelorMittal, and auto parts supplier Valeo led the CAC into positive territory, rising 2.5% and 2.3% respectively, followed by media company Vivendi, and luxury goods company Kering which were up 2.2% each. IT and consulting firm Cap Gemini rose 1.8%, while oilfield services firm TechnipFMC, and supermarket operator Carrefour were up 1.5% and 1.3% respectively.

The FTSE gained 0.43%, the DAX climbed 0.99%, and the CAC-40 rose 0.65%.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2016 All rights reserved. Unauthorized reproduction is strictly prohibited.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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