Commodity producers and banks push Europe stocks higher

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.