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.
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