European stocks tread water as FTSE heads for record streak

Commodity producers gain while utilities and banks decline

Traders at the stock exchange in Frankfurt: European stocks were little changed late on Tuesday morning. Photograph: Reuters

Traders at the stock exchange in Frankfurt: European stocks were little changed late on Tuesday morning. Photograph: Reuters

 

European stocks were little changed as gains in commodity producers offset losses in utilities and banks.

By late morning, the Stoxx Europe 600 Index added less than 0.1 per cent in London, erasing an earlier slide of as much as 0.4 per cent.

The FTSE 100 Index is poised to close at a record for a ninth straight day, which would make it a record streak of all-time highs. Coming on the heels of its best annual performance relative to the Stoxx 600 in three decades, the FTSE 100 has climbed 1.7 per cent in 2017 as a further slump in sterling boosted its exporters, and miners rallied.

Lenders headed for their worst two-day drop in two months, while miners led gains after data showed China’s factory prices rose at the fastest pace in more than five years in December.

Advances in UK grocers also tempered losses, with Morrison Supermarkets up 3.9 per cent as it raised its profit forecast after posting its best Christmas sales in seven years.

Risk aversion

“A market backdrop where risk aversion continues to decrease in conjunction with falling stock correlations suggest that this may be the start to an improving environment for stock selection,” Citigroup strategists said.

The Stoxx 600’s relative strength index remains below 70 after yesterday dropping below the overbought level, which to some technical analysts signals further declines.

– (Bloomberg)