European stocks backed by commodities, Powell’s speech in the spotlight
- Chemical actions hit record high
- Value stock banks, miners again in favor
- Focus on the Fed’s list of speakers this week
- Irish stocks climb as DUP appoints new leader
June 22 (Reuters) – European stocks stabilized on Tuesday as mining and energy stocks benefited from stable commodity prices, as investors pulled back ahead of a speech by US Federal Reserve Chairman Jerome Powell.
The pan-European STOXX 600 (.STOXX) closed 0.3% higher after fluctuating between gains during the session, with mining stocks (.SXPP) rising 1.3% as base metal prices appear have stabilized after a recent fall.
Chemicals stocks (.SX4P) rose 1.1% to a record high as investors favored sectors most likely to benefit from an economic recovery this year.
Irish stocks (.ISEQ) were the best performers in the region, rising 1.6% after the Democratic Unionist Party of Northern Ireland named Jeffrey Donaldson as its new leader – its third leader in just weeks in the amid crucial post-Brexit talks. Read more
Irish shares fell last week after Donaldson’s predecessor Edwin Poots resigned after just three weeks on the job. Read more
Among the broader markets, economically sensitive sectors including banking (.SX7P) and industrials (.SXNP) rose amid signals that the Fed may start raising interest rates soon.
This week the focus will be on a slew of Fed speakers, starting with President Jerome Powell, who is due to speak to the US Congress on Tuesday at 6:00 p.m. GMT. Read more
âWhile Powell is among those who believe monetary policy normalization should begin in the coming months, stocks and other risk-related assets are likely to fall again,â said Charalambos Pissouros, senior market analyst at JFD Group .
After recording its worst week in four months on Friday, the pan-European STOXX 600 was helped by encouraging comments from European Central Bank President Christine Lagarde on economic growth. Read more
Europe’s volatility index (.V2TX) was down to 17.77 after hitting a one-month high of 22.99 on Monday.
Oil and gas stocks (.SXEP) rose 0.9% as oil prices recovered from recent losses, while real estate stocks (.SX86P) were also among the top gainers.
Travel and Leisure (.SXTP) stocks rose 0.5% after UK Health Secretary Matt Hancock said the country was working to ease travel restrictions for fully vaccinated people. Read more
Among individual movers, Irish building insulation manufacturer Kingspan Group (KSP.I) topped the STOXX 600 after forecasting strong sales for the first half of 2021.
French healthcare group Sanofi (SASY.PA) fell 0.6% even as it said the company and its US partner Translate Bio (TBIO.O) began a Phase I clinical trial evaluating an experimental mRNA-based vaccine against seasonal influenza.
Report by Sagarika Jaisinghani in Bengaluru; Editing by Shounak Dasgupta
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