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European shares supported by gains in mining and oil companies
June 6, 2016 / 4:36 PM / in 2 years

European shares supported by gains in mining and oil companies

* Mining and energy stocks among top performers

* Airline stocks fall after Barclays price target cuts

* Many investors remain cautious before “Brexit” vote (ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details)

By Sudip Kar-Gupta and Alistair Smout

LONDON, June 6 (Reuters) - European stocks edged up on Monday, helped by gains in major mining and oil company shares following weakness in the dollar prompted by Friday’s weak U.S. jobs data.

The pan-European STOXX 600 and FTSEurofirst 300 equity indexes rose 0.3 and 0.4 percent respectively, having fallen around 1 percent on Friday.

European shares were led up by Britain’s FTSE 100, which rose 1 percent and is heavily weighted in commodity-related shares.

The U.S jobs data hit the dollar, but this in turn gave a lift to the commodity sector, since a weaker greenback makes commodities priced in that currency more affordable for consumers paying with other currencies.

The STOXX Europe 600 Basic Resources sector rose 4.3 percent, boosted by a rise for miners.

Mining stocks such as Anglo American, Rio Tinto and BHP Billiton rose more than 6 percent as the price of copper climbed to its highest level in around four weeks.

“Commodity stocks are continuing to benefit from Friday’s sharp drop in the US dollar,” Jasper Lawler, market analyst at CMC Markets, said.

The shares of oil majors such as BP and Total also rose as oil prices advanced.

However, shares in airlines Air France KLM, Lufthansa and International Consolidated Airlines Group all fell after analysts at Barclays cut their price targets on the stocks.

“Even if their margins are still rising thanks to fuel savings, many airlines across the globe would admit that demand is softer than anticipated,” Barclays wrote in a note.

Travel and leisure stocks dropped 0.4 percent, the biggest sectoral faller.

Persistent concerns that Britain will vote to leave the European Union in a referendum on June 23 also kept investors on edge. A series of polls showed that the ‘Out’ campaign was gaining momentum, with YouGov and ICM polls giving it a 4-5 point lead.

That put pressure on the pound but also hit certain UK-listed stocks with exposure to the domestic economy.

Housebuilders such as Berkeley, Persimmon and Barratt Developments are expected to be some of the stocks most affected by any British exit from the EU, or Brexit, and were down 0.5-1.5 percent.

Today’s European research round-up

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.

If you have any thoughts, suggestions or feedback on this, please email

Mike Dolan, Markets Editor EMEA. (Editing by Tom Heneghan)

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