European stocks pause near record high; Middle East, economic data in focus

EUROPE’S benchmark stock index held near a record high on Monday (Aug 10) as investors paused ahead of a week packed with economic data, while uncertainty surrounding the Middle East conflict kept oil prices elevated.

The pan-European Stoxx 600 was little changed at 660.45 points. The energy sector led gains, rising 1.3 per cent, as oil prices climbed for a fourth straight session.

Iran said the US 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 Kiran Ganesh, managing director, global head of investment communications at UBS.

Investors are also focused on euro zone employment data and US consumer price figures due later this week for clues on the outlook for interest rates.

Softer-than-expected US jobs data last week and strong corporate earnings on both sides of the Atlantic helped lift the Stoxx 600 1.7 per cent to a record high on Friday.

“Looking at corporate earnings, neither the crisis (in Middle East), nor tariffs, nor overshooting chip prices have derailed companies from doing good business,” said Ipek Ozkardeskaya, senior analyst at Swissquote.

The basic resources sector rose 0.9 per cent, tracking firmer copper and precious metal prices, while technology shares gained 0.3 per cent.

By contrast, the telecoms sector was the biggest decliner, falling 2.1 per cent, as Deutsche Telekom and Vodafone slipped 3.2 per cent and 3.1 per cent, respectively.

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Media stocks fell 1.6 per cent, with Britain’s biggest advertising group WPP down 5 per cent and French rival Publicis Group losing 1.4 per cent.

With the earnings season nearing an end, LSEG estimates show second-quarter Stoxx 600 earnings are expected to rise nearly 21 per cent, up from forecasts of about 12.5 per cent in early May.

Plus500 rose 2.1 per cent 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 per cent after the Financial Times reported credit insurer Allianz was cutting cover for the affordable homebuilder’s suppliers by up to 70 per cent.

Coca-Cola HBC fell 4.8 per cent after BNP Paribas cut its rating on the bottler to “neutral” from “outperform”. REUTERS