European equities rose on Monday, as investors weighed robust earnings reports and a brightening economic outlook against the risks of rising inflation and higher taxes. The U.K. market is closed for a public holiday.
The Stoxx Europe 600 Index climbed 0.4% as of 9:30 a.m. CET, tracking in gains in U.S. index futures and moving closer to historic highs reached last month. Consumer products and technology were among the biggest gainers, while Siemens Gamesa Renewable Energy SA dragged energy shares lower after Citigroup Inc. said in a note that the company’s 2021 guidance was disappointing.
The Stoxx 600 Index has gained 10% this year, buoyed by expectations of rapid economic recovery, as vaccinations against the coronavirus progress while fiscal and monetary policy across the region remain loose. With much of the positive news already priced in lofty valuations, momentum has stalled in the past weeks, even as European companies are delivering one of the best earnings seasons on record.
“The ‘laissez-faire attitude of central bankers will not prevent long rates from rising,” Oddo strategist Sylvain Goyon wrote in a note on Monday. “This situation, current and past, is favorable to a reduction in the dispersion of expectations and therefore of a return of the preference for value.”
S&P 500 futures rose 0.5% and those on the Nasdaq 100 were 0.4% higher.
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— With assistance by Michael Msika