Gains in mining stocks give European shares a dig-out

European shares rose on Monday after five straight weeks of declines as gains in mining stocks and positive earnings outweighed worries of a looming policy-tightening cycle and geopolitical tensions.

DUBLIN

The Irish index of shares closed up 1.7 per cent on Monday, tracking the wider European trends.

Banking stocks led the way as investors continued to bet on rising interest rates globally, with AIB gaining 2.75 per cent over the session to close at just over €2.50, while Bank of Ireland finished the day at €6.55, up 2.2 per cent. Permanent TSB gained 1.5 per cent, closing at €1.695.

Travel and tourism stocks also ticked higher, with hotel group Dalata gaining 1.75 per cent to end at €4.06, and Ryanair adding 2.7 per cent over the session to €17.04.

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Building stocks were mixed, with Kingspan gaining 2.86 per cent, but CRH was off slightly at 0.18 per cent down. Homebuilder Cairn lost just under 1 per cent over the session, while Glenveagh was marginally higher, up 0.16 per cent by the end of the day.

Elsewhere, food group Kerry saw its shares rise just over half a per cent, while Glanbia was down 0.41 per cent.

LONDON

Britain’s main equity index rose on Monday, led by banking stocks, while stronger commodity prices lifted mining shares.

The blue-chip Ftse 100 index rose 0.8 per cent, with HSBC, Barclays and Lloyds Group up about 2 per cent each, extending last week's winning run.

Miners Anglo American and Rio Tinto provided the biggest boost, as aluminium prices in China jumped 3 per cent, while Shanghai steel and iron ore futures also rose on hopes of economic stimulus.

A rally in the oil and banking sectors helped the Ftse 100 index buck weakness in global markets and end last week in positive territory, as oil prices hit a seven-year high and the Bank of England raised rates last week to fight inflationary pressures.

Shell gained 1.2 per cent after multiple brokerages raised price targets, BP rose 0.7 per cent, recording its highest closing levels since March 2020.

The domestically focused mid-cap index climbed 0.4 per cent, after ending marginally higher last week.

Taylor Wimpey rose 0.5 per cent, as it named company insider Jennie Daly as its next chief executive officer, two months after one of its largest shareholders called for an outsider to lead Britain's third-largest homebuilder.

Reckitt Benckiser inched up 0.7 per cent after Bloomberg News reported that the consumer goods giant was considering options for its infant nutrition business, including a potential sale.

EUROPE

The pan-European Stoxx 600 rose 0.7 per cent after sinking more than 5 per cent this year, following sharp declines in tech stocks as broad inflationary pressures invited hawkish comments from major central banks.

Mining stocks were among the top performers for the day, rising 1.7 per cent after positive comments from major commodity importer China pushed up metal prices.

“[The European Central Bank] could, after all, decide to lift rates in 2022. Prior remarks by [ECB president Christine] Lagarde and her colleagues highlighted no lift-offs this year, but now that door is open,” said Charalambos Pissouros, head of research at JFD Group.

Still, Lagarde said on Monday that inflation pressures could subside before becoming entrenched in expectations, which would negate the need for drastic monetary policy changes.

Among individual stocks, Aurubis, Europe's largest copper producer, firmed up 3.2 per cent after confirming an 85 per cent rise in quarterly profit and reiterating higher full-year earnings estimates on solid metal prices and output.

French automotive group Faurecia advanced 0.9 per cent after saying it would aim for sales of above €33 billion in 2025, at an operating profit margin of more than 8.5 per cent.

Shares in French care homes company Korian slid lower on Monday after a Paris lawyer said she was preparing a group lawsuit against the company, amid complaints of malpractice in the firm's facilities.

NEW YORK

Wall Street shares rose on Monday, as European bond yields jumped after the European Central Bank last week drove speculation about monetary tightening as soon as March, and yields of benchmark 10-year US Treasuries hit two-year highs.

The Nasdaq rose, with Amazon. com providing a boost, after a week of choppy trading spurred on by mixed quarterly results from big technology companies, while Peloton jumped on media reports of interest from potential buyers including Amazon.

The Dow Jones Industrial Average rose 120.89 points, or 0.34 per cent, to 35,210.63, the S&P 500 gained 17.91 points, or 0.40 per cent, to 4,518.44 and the Nasdaq Composite added 94.51 points, or 0.67 per cent, to 14,192.52 by 10.38am EST.

Two-year US Treasury note yields hit a two-year high and US 10-year yields stayed close to two-year highs hit on Friday.