European stocks recover early losses after mining rally

European equities were boosted on Monday by a strong rally in mining stocks, which helped markets overcome losses recorded earlier in the session amid concerns about inflation and the upcoming earnings season.

Europe’s mining sector surged 3 per cent to post its biggest daily gain in three months as iron ore and coking coal rallied on supply fears, while base metals prices jumped on concerns about the rising cost of energy and raw materials.

As a global energy crunch lifted crude prices, oil stocks rose more than 1 per cent, as did shares in automotive companies, offsetting losses elsewhere.

DUBLIN

The Iseq closed almost 0.6 per cent lower, with its biggest stocks experiencing mixed fortunes during the session. Building materials group CRH, which is exposed to fears about the rising cost of raw materials, slipped 1.4 per cent to €40.10, while packaging company Smurfit Kappa closed 1.1 per cent lower at €44.53.

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However, Ryanair enjoyed some momentum, adding 1 per cent to €16.99, and AIB was another climber, finishing up 0.5 per cent at just below €2.42.

Bank of Ireland declined 0.7 per cent, however, to €5.03, and homebuilder Glenveagh Properties fell 0.9 per cent to €1.12.

It was a largely sluggish day elsewhere on the Dublin market, although real estate investment trust stocks Hibernia Reit and Irish Residential Properties Reit both climbed about 1 per cent.

LONDON

The heavy presence of commodity-related companies on the blue-chip index saw London’s FTSE 100 outperform other European markets with a 0.7 per cent rise. The mid-cap FTSE 250 closed 0.2 per cent lower.

Royal Dutch Shell, BP, Anglo American and Rio Tinto were among the top gainers, helping the FTSE 100 to its third consecutive day in positive territory.

Banks HSBC, Lloyds Banking Group and Natwest Group all rose more than 2 per cent after hawkish comments from Bank of England officials drove more bets on a November interest rate increase.

Among other stocks, British online fashion retailer ASOS tumbled 13.4 per cent after it warned higher logistics costs and supply chain disruption could force 2022 profits down more than 40 per cent. The company also said chief executive Nick Beighton will step down.

Aer Lingus and British Airways owner International Consolidated Airlines Group (IAG) added 1.3 per cent.

EUROPE

The pan-European Stoxx 600 index recouped losses of as much as 0.6 per cent on the day to end fractionally higher. In Frankfurt the Dax ended marginally lower, while in Paris the Cac 40 closed up almost 0.2 per cent.

The banking index touched its highest since February 2020, recovering almost all pandemic-induced losses as investors jacked up interest rate expectations. Money markets are pricing in a 10 basis-point rate hike from the European Central Bank by the end of next year.

German real estate investor Adler Group slipped 2.5 per cent after it agreed to sell residential and commercial property worth €1.49 billion to rival LEG Immobilien .

US

Wall Street stock indexes rose in early trading as growth and financial stocks gained, shrugging off inflation worries in the run-up to third-quarter earnings reports from later this week.

Mega-caps Apple, Tesla and Microsoft rose between 0.6 per cent and 1 per cent, with nine of the 11 major S&P 500 sector indexes trading higher.

Banks added 0.6 per cent ahead of earnings reports from JPMorgan Chase & Co on Wednesday, and Bank of America, Morgan Stanley and Citigroup on Thursday.

Markets were subdued earlier in the day after US oil rose nearly 3 per cent to a seven-year high, feeding into fears of higher inflation.

Southwest Airlines slipped 1.3 per cent on a report that it cancelled at least 30 per cent of its scheduled flights on Sunday.

– Additional reporting: Reuters