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European stocks extend gains on support from oil, utilities

Stock Markets1 hour ago (Mar 09, 2021 05:10AM ET)

(C) Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt

By Sruthi Shankar and Devik Jain

(Reuters) – European stocks extended gains on Tuesday after posting their best session in four months a day earlier, as gains in shares of oil and utility companies helped counter losses in miners.

The pan-European STOXX 600 edged 0.3% higher after opening lower, with energy and utility sectors rising more than 1.5% each.

Danish jewellery maker Pandora (OTC:PANDY) A/S jumped 7% to the top of STOXX 600 after reporting a 12% rise in organic sales in February.

The continent’s stock markets have come under pressure as a jump in bond yields on the back of quick vaccine rollouts and a massive U.S. fiscal package has fanned worries about a potential rise in inflation.

Still, major European indexes have fared better than some of their tech-heavy U.S. peers.

“European market is much less tech heavy than the S&P 500, much less growth dominated, so higher bond yields are not such a negative,” said Nick Nelson, head of European equity strategy at UBS.

“The speed of the move has been an issue … if we’re talking about a gentle rise in yields from here on, then that’s more manageable, and more cyclical parts of the market such as Europe would do better.”

The MSCI Europe value index, which includes banking, energy and auto stocks, have risen about 9% so far this year, while its growth counterpart that tracks tech and healthcare stocks is up just 0.9%.

Miners fell 1% as Dalian iron ore futures tumbled by the 10% daily limit on anti-pollution restrictions in China’s top steelmaking city of Tangshan, while metal prices were also hit by a firm dollar. [IRONORE/] [MET/L]

UK-listed miners Rio Tinto (NYSE:RIO), BHP Group (NYSE:BHP) and Anglo American (LON:AAL) fell between 1.2% and 2.4%, weighing on the commodity-heavy FTSE 100.

Investors will closely watch a European Central Bank meeting later this week to see if policymakers have decided to step up the pace of emergency bond purchases to calm skittish markets.

Meanwhile, data showed German exports unexpectedly rose in January buoyed by robust trade with China. A more comprehensive revised reading on euro zone’s fourth-quarter GDP data is due at 10 a.m GMT.

Among other stocks, British insurer and asset manager M&G Plc gained 6% after it posted better-than expected 2020 operating profit in its first full year as a standalone company.

German automotive parts maker Continental AG (OTC:CTTAY) fell 5.1% after it forecast 2021 outlook below expectations.

European stocks extend gains on support from oil, utilities

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