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Europe: Stocks advance as miners, oil shares climb on price gains
[FRANKFURT] European stocks rebounded from their first weekly drop in a month as energy and raw-material producers advanced, while UK shares surged.
Rio Tinto Group and BHP Billiton Ltd. led miners to the best performance of the 19 industry groups on the Stoxx Europe 600 Index as commodities jumped. BP Plc added 2.8 per cent, pushing oil stocks higher, as crude rose after Abu Dhabi forecast prices could climb as high as US$60 a barrel.
Air France- KLM Group slid 5.4 per cent, dragging travel-and-leisure stocks to the biggest drop on the equity benchmark as Barclays Plc cut its price target on the airline.
The Stoxx 600 climbed 0.3 per cent to 342.41 at the close of trading, after earlier rising as much as 0.6 per cent. The UK's FTSE 100 Index gained the most among major western-European markets, adding 1 per cent, as miners jumped and the pound weakened after polls showed more Britons favour exiting the European Union with less than three weeks until the membership referendum.
"Oil and commodities are better again and that's helping stocks, but it will be a very volatile week with the Brexit vote coming closer and closer," said Michael Woischneck, who oversees about 300 million euros (S$462 million) at Lampe Asset Management in Dusseldorf, Germany.
"People are interpreting there won't be a rate hike after the jobs report Friday and for me that's very complacent because we shouldn't forget the longer-term trend."
European share gains stalled last week amid resurgent worries about global growth, and as disappointing US jobs data cast doubt on the strength of the world's biggest economy and on whether the Federal Reserve will raise rates at its next meeting.
Fed Chair Janet Yellen speaks in Philadelphia today and may offer guidance on how much the payrolls report will influence the timetable for tightening monetary policy. The central bank will announce its next rate decision on June 15.
Traders are now pricing in a 4 per cent chance of an increase this month - down from 22 per cent before the jobs data on Friday - and a 31 per cent probability in July.
Among stocks moving on corporate news today, CNH Industrial NV gained 6.3 per cent after it was added to Goldman Sachs Group Inc's conviction list. Indivior PLC tumbled 11 per cent after Bank of America Merrill Lynch cut its rating on the pharmaceutical company to neutral from buy.