European Stocks Rise as US CPI Reassures Bulls
European stocks rose on Monday, with the Stoxx Europe 600 Index heading for its fifth consecutive day of gains, as investors were reassured by the US consumer price index (CPI) data.
The Stoxx 600 rose 0.3% in early trading, with all sectors and major bourses in positive territory. The index has gained more than 5% since the start of the month, and is now up more than 8% since the start of the year.
The gains came after the US Labor Department reported that the CPI rose 0.6% in June, in line with expectations. The data suggested that inflationary pressures remain contained, which could give the Federal Reserve more room to keep interest rates low.
Risk Appetite Returns
The data also helped to boost investor sentiment, with risk appetite returning to markets. The euro rose 0.2% against the dollar, while the pound was up 0.3%.
The gains in European stocks were broad-based, with all sectors in positive territory. Banks were the biggest gainers, with the Stoxx Europe 600 Banks Index rising 0.7%.
The gains were led by Spanish banks, with Banco Santander SA and BBVA SA both rising more than 2%. Other notable gainers included Credit Suisse Group AG, which rose 1.3%, and UBS Group AG, which rose 1.2%.
Tech Stocks Lead Gains
Technology stocks were also among the biggest gainers, with the Stoxx Europe 600 Technology Index rising 0.6%.
The gains were led by chipmakers, with Dialog Semiconductor Plc and STMicroelectronics NV both rising more than 2%. Other notable gainers included ASML Holding NV, which rose 1.3%, and Infineon Technologies AG, which rose 1.2%.
Retailers Rebound
Retailers were also among the biggest gainers, with the Stoxx Europe 600 Retail Index rising 0.5%.
The gains were led by French retailers, with Carrefour SA and Casino Guichard-Perrachon SA both rising more than 2%. Other notable gainers included Marks & Spencer Group Plc, which rose 1.3%, and Tesco Plc, which rose 1.2%.
Commodities Rebound
Commodities also rose, with Brent crude oil rising 0.7% to $43.80 a barrel. Gold also rose, with spot gold up 0.3% to $1,841.90 an ounce.
Outlook
The gains in European stocks come as investors remain optimistic about the outlook for the region. The European Central Bank is expected to keep interest rates low, while the European Union is expected to launch a massive stimulus package to help the region’s economies recover from the pandemic.
At the same time, the US economy is expected to continue to recover, which could help to support global growth.
Overall, the outlook for European stocks remains positive, with investors expecting further gains in the coming weeks.