The pan-European STOXX 600 held near a record high on Monday as investors awaited a week packed with economic data, while Middle East uncertainty kept oil prices elevated. Iran said reopening the Strait of Hormuz depends on US conditions being met, even as it signaled it was close to a deal with Oman on new shipping lanes, while strong earnings and a softer US jobs report kept sentiment supported.
The STOXX 600 was little changed at 660.45 points on Monday. The energy sector led gains, rising 1.3%, as oil prices climbed for a fourth straight session.
Iran signals movement on Hormuz shipping lanes
Iran said the United States must meet several conditions before it reopens the Strait of Hormuz, while signalling it was close to an agreement with Oman on new shipping lanes through the waterway. The strait is a critical energy corridor for Europe. "Markets are really just in a period of digestion and wait-and-see," said UBS's Kiran Ganesh, the bank's global head of investment communications.
Investors are also watching euro zone employment data and US consumer price figures due later this week for clues on the interest-rate outlook. Softer-than-expected US jobs data last week, combined with strong corporate earnings on both sides of the Atlantic, had already lifted the STOXX 600 1.7% to a record high on Friday.
Earnings season lifts sentiment despite crisis backdrop
Swissquote senior analyst Ipek Ozkardeskaya said corporate earnings show that neither the Middle East crisis, tariffs, nor rising chip prices have derailed companies from doing good business. With the earnings season nearing an end, LSEG estimates show second-quarter STOXX 600 earnings are expected to rise nearly 21%, up from forecasts of about 12.5% in early May.
The basic resources sector rose 0.9%, tracking firmer copper and precious metal prices, while technology shares gained 0.3%.
Telecoms and media stocks lag as single names swing
By contrast, the telecoms sector was the biggest decliner, falling 2.1%, as Deutsche Telekom and Vodafone slipped 3.2% and 3.1%, respectively. Media stocks fell 1.6%, with WPP down 5% and Publicis Group losing 1.4%.
Among individual movers, Plus500 rose 2.1% after the trading platform reported higher half-year core profit, helped by increased trading activity as it expanded in the US and rolled out more products. Vistry dropped 12.2% after the Financial Times reported credit insurer Allianz was cutting cover for the affordable homebuilder's suppliers by up to 70%. Coca-Cola HBC fell 4.8% after BNP Paribas cut its rating on the bottler to "neutral" from "outperform".
Source: Economy News
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