Markets

European Stocks Advance as Dollar Weakness Bolsters Miners, Commodity-Producers

European stocks rose on Tuesday, driven by a weaker dollar that benefits mining companies and commodity producers, as traders reduce bets for imminent US rate increases.

The pan-European STOXX 600 index rose 0.3% and the euro-region blue-chip STOXX 50 index advanced 0.6%. The DAX index was 0.6% higher in Frankfurt and the FTSE 100 in London was little changed. The CAC 40 in Paris gained 0.2%.

The UK banks Standard Chartered (STAN.L) was the biggest gainer on the FTSE, rising 5.4%, followed by miner Anglo American (AAL.L), which rose 5.1%. Leisure group Whitbread (WTB.L) declined 1.9% in London following the news that Chris Rogers, the managing director of its Costa coffee shop chain is leaving the company.

'''We've got a combination of a weak (US dollar) helping everyone, because precious metals are also priced in US dollars, and a really rather risk-on mentality in the markets helping basic materials,'' Augustin Eden, research analyst at Accendo Markets in London, said by e-mail. ''With (emerging markets)-focused bank Standard Chartered sitting right up there with an Anglo-Australian miner called Anglo American, our hypothesis is nearly confirmed. It's risk-on Tuesday.''

Italian banks were again in the spotlight, with Banco Popolare (BP.IM) gaining 6.5% and Banca Monte dei Paschi di Siena (BMPS.MI) raising 4.4%, bolstered by the government's plan to create a rescue fund that would support weaker lenders.

Commerzbank (CBK.DE) led gains in Germany, up 2%. Energy company E.ON (EOAN.DE) and industrial conglomerate ThyssenKrupp (TKA.DE,) also advanced, both up 1.5%.

Dassault Aviation (AM.PA) declined 2% in Paris after Goldman Sachs cut its price target and LVMH (LVMH.PA) fell 2.4% as revenue was flat at its core fashion and leather-goods division after last year's terrorist attacks kept tourists away from the French capital. Accor (AC.PA) led stocks higher in Paris, gaining 4%, after Bloomberg reported that Chinese hotel operator Jin Jiang International is considering boosting its stake in its French rival.

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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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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