Industrial metals push Europe’s equity index lower

On Wednesday, miners weighed on Europe’s benchmark equity index as most industrial metals traded lower and a surge in the euro added a further headwind. Oil fluctuated after retreating from its brief rise above $50 a barrel.

Rio Tinto Plc led the decline among basic resources shares after first-half profit missed estimates. Banks dropped after Standard Chartered Plc said it can’t resume dividends amid an uncertain recovery, while Societe Generale SA slumped as litigation costs increased. Oil traded near $49 a barrel as U.S. crude stockpiles expanded, while copper dropped a second day and gold edged lower. The euro, coming off its best month since March 2016, reached a new two-and-a-half-year high against the ailing dollar.

The common currency’s longest rally since 2013 has been sustained by interest-rate differentials and broad dollar weakness as investors lost faith in Donald Trump’s spending plans amid an administration in disarray. With the dollar index near a two-year low, the options market shows that traders are gearing up for more euro strength, with demand growing for calls, which give the right to buy. The currency’s advance has pushed European earnings revisions into negative territory, according to Credit Suisse Group AG.

While most company results this quarter are supporting the case for a firm global economy that’s propelling equity gauges to new highs, questions remain about how long the rally can run amid stretched valuations and mixed U.S. data.

The Stoxx Europe 600 Index dipped 0.2 percent as of 6:48 a.m. in New York. The U.K.’s FTSE 100 Index sank 0.3 percent. Germany’s DAX Index decreased 0.1 percent.

The euro climbed 0.3 percent to $1.1835 after reaching the strongest level since January 2015 earlier. The British pound advanced 0.3 percent to $1.3238, the strongest in more than 10 months on a closing basis.

Japan’s Topix index gained 0.4 percent. Honda jumped following the company’s higher profit forecast.