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Europe: Stocks edge up, lifted by financials
[LONDON] European stock markets rose on Monday, propped up by gains in the shares of major banks and other financial stocks, while Dutch firm PostNL surged after results.
The pan-European Stoxx 600 index edged up 0.04 per cent, with Germany's DAX, Britain's FTSE and France's CAC all 0.1-0.6 per cent higher.
The Stoxx Europe 600 Bank index advanced 1.4 per cent, helped by a 3.6 per cent rise at Barclays after Exane BNP Paribas upgraded Barclays to "outperform" from "neutral".
Insurers also rose, up 1.5 per cent, while basic resources stocks were up 1.7 per cent as miners rallied on stronger copper and iron ore prices.
Shares in Dutch postal service operator PostNL surged 8.2 per cent after the company confirming its full-year outlook, while analysts also welcomed a surprise improvement in its equity position.
According to data from Thomson Reuters StarMine, 61 per cent of companies on the Stoxx 600 index have beaten or met forecasts with their second quarter results so far, although those earnings are down 15 per cent from last year on average.
"There's plenty of confidence over in the States, and that's been helping Europe, but I'd still be on the defensive side concerning European markets and I'd be looking to sell rallies," said Berkeley Futures' associate director Richard Griffiths.
"There's still much macroeconomic uncertainty in Europe."
Defence equipment maker Meggitt rose 8.8 per cent after activist investment firm Elliot Capital Advisors took a stake of over 5 per cent in the firm.
Traders also said stocks were being supported by a rally on US markets, with the S&P 500 starting the week with a new record high after strong jobs data on Friday.
While the Stoxx 600 has recovered much of the ground lost in the immediate aftermath of Britain's vote in June to quit the European Union, the index remains down by 6 per cent so far in 2016.
Andreas Clenow, chief investment officer at ACIES Asset Management in Zurich, echoed Mr Griffiths' view of preferring US to European shares at present.
"The US markets look pretty healthy. We keep making record highs in the US but the European stock markets look much more sluggish," said Mr Clenow.