Com­mod­ity pro­duc­ers and banks push Europe stocks higher

Malta Independent - - FINANCIAL -

Gains in com­mod­ity pro­duc­ers and banks helped Eu­ro­pean stocks re­bound from their fourth de­cline in five days, amid op­ti­mism mone­tary pol­icy will re­main sup­port­ive of growth.

Glen­core Plc and Fres­nillo Plc paced an ad­vance in min­ers as the dol­lar ex­tended its drop from a seven-month high, as traders spec­u­lated that a pick-up in the out­look for global in­fla­tion won’t tempt the Fed­eral Re­serve to quicken the pace of rate rises. En­ergy shares fol­lowed crude higher. Al­most ev­ery lender in the Stoxx Europe 600 In­dex rose, with those in Italy lead­ing gains, ahead of the Eu­ro­pean Cen­tral Bank’s meet­ing on Thurs­day. The re­gional bench­mark added 1.2 per­cent at 11:47 a.m. in Lon­don.

Wor­ries about the ECB and the Fed turn­ing less ac­com­moda­tive have weighed on equities in re­cent weeks, hin­der­ing gains for the Stoxx 600 after it reached a four-month high in Septem­ber. Tues­day’s gains help trim the eq­uity gauge’s de­cline in Oc­to­ber to 0.5 per­cent.

Eu­ro­pean equities have scope to rally through the end of the year if prof­its re­main sta­ble, and their val­u­a­tions will help cush­ion the im­pact of po­ten­tial risks, Bar­clays Plc says.

Bonds around the world have slumped this month on spec­u­la­tion higher oil prices will prompt an ac­cel­er­a­tion in in­fla­tion glob­ally, and data on Tues­day showed U.K. con­sumer prices rose at the fastest pace in al­most two years. Traders are pric­ing in a 66 per­cent chance the Fed will raise rates in De­cem­ber, and about even odds of an­other in­crease in 2017.

Asian stocks headed for the big­gest ad­vance in al­most a month, led by com­mod­ity shares, as mixed U.S. eco­nomic data spurred op­ti­mism that the U.S. will keep mone­tary pol­icy ac­com­moda­tive. The MSCI Asia Pa­cific In­dex rose 0.9 per­cent to 139.37 as of 4:10 p.m. in Hong Kong.

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