European stocks have reached new highs as optimism about the reopening of economies and easy monetary policy lifted sectors that typically benefit from a recovery.
The pan-European STOXX 600 index rose 0.1% on Monday (May 10) to hit an all-time high, with mining stocks rallying 2.6% to a 10-year-high on strong commodity prices.
British miners such as Rio Tinto, BHP Group and Glencore each rose nearly 3%. China’s benchmark iron ore futures surged 10% to a record high, steel prices rose 6% and copper prices touched record levels on hopes for improved demand amid tightening supply.
Investors will be focusing on U.S. inflation data later this week to gauge if a strong rise in prices will drive the U.S. Federal Reserve to change its policy stance on interest rates. A weaker-than-expected U.S. jobs report last Friday (May 7) boosted hopes that interest rates will remain low for a longer period of time.
The United Kingdom’s commodity-heavy FTSE 100 stock index rose 0.2% despite a surge in the British pound, with British Prime Minister Boris Johnson set to announce the next phase of reopening in the U.K. from COVID-19 lockdown measures.
The current earnings season entered its home stretch, with about two-thirds of STOXX 600 companies having reported their first-quarter results. About three-quarters of those companies have topped profit estimates, according to Refinitiv data.
Shares of German biotech company BioNTech surged 9.6% in European trading after revealing plans to build a new manufacturing site for its vaccines based on messenger RNA technology (mRNA) in Singapore. And shares of British bakery and fast-food chain Greggs jumped 9% as it raised its profit outlook after a strong recovery in sales following the easing of COVID-19 restrictions.
