European Equity Benchmarks Close Higher; Mining, Auto, Energy Stocks Boost Markets

The broad-based major European indices closed higher in Tuesday trading as mining, automotive and energy stocks pushed the markets into positive territory.

In economic news, there was widespread growth across all monitored sectors at the start of Q3, according to the latest Europe Sector PMI data from IHS Markit. Technology continued to lead growth at the broad sector level, with a stronger expansion recorded in July. The increase was supported by a sharp rise in technology equipment.

IHS Markit reported that the positives included a faster increase in the health care category, where growth rebounded to a five-month high. Additionally, after five straight months of contraction, health care services expanded during July, which coincided with an increase in pharmaceuticals and biotechnology output. At the same time, industrials saw growth sharpen in July, registering the fastest pace of increase in five months. And the financials sector saw growth slow down from the previous survey period, reflecting a slowdown in both banking and other financials.

In the UK, house prices in the three months to July increased by 3.3% compared to the same period last year, according to Halifax, with the average house price rising to a record of GBP230,280 ($298,509). On a monthly basis, prices rose 1.4% in July, while in the most recent quarter, (May-July) prices were 1.3% higher than in the preceding three months.

“While the quarterly and annual rates of house price growth have improved, housing activity remains soft,” said Russell Galley, managing director, Halifax. “Despite the recent modest improvement in mortgage approvals, the latest survey data for new buyer enquiries and agreed sales suggest that approvals will remain broadly flat until the end of the year.”

And in Germany, production in industry was down 0.9% in June from the previous month on a price, seasonally and calendar adjusted basis according to provisional data from the Federal Statistical Office (Destatis). Production in industry excluding energy and construction was down 0.8% for the month. Within industry, the production of capital goods decreased 0.6%, and the production of consumer goods dropped 1.6%. The production of intermediate goods showed a decrease of 0.8%, while energy production was up 2.9%, and the production in construction decreased 3.2%.

Destatis also reported that Germany exported goods worth EUR115.5 billion ($134 billion) and imported goods worth EUR93.7 billion euros in June, which is the highest monthly import value since foreign trade statistics were first published in 1950. German exports increased 7.8% and imports 10.2% in June year on year. After calendar and seasonal adjustment, exports were unchanged from May, while imports were up 1.2%.

The foreign trade balance showed a surplus of EUR21.8 billion in June, compared to EUR22.1 billion euros during the year-ago month. In calendar and seasonally adjusted terms, the foreign trade balance recorded a surplus of EUR19.3 billion euros in June.

In equities, mining stocks helped buoy the FTSE in London as Glencore, Anglo American, and BHP Billiton climbed 3.9%, 3.5%, and 2.2% respectively. Energy provider Centrica was up 2.3%, while communications group WPP, and luxury goods company Burberry Group each closed 2.2%, higher. Pharmaceutical firm AstraZeneca rose 2%, while water services firm United Utilities, and oil company BP increased 1.7% each.

In Frankfurt, postal services provider Deutsche Post led the DAX higher, rising 3.8%, followed by Deutsche Bank, and construction materials supplier Heidelbergcement, which were up 1.6% and 1.4% respectively. Automotive stocks also help lift the market as automakers Daimler, Volkswagen, and BMW climbed 1.1%, 1%, and 0.7% respectively, while tire maker Continental was up 0.8%.

In Paris, steel and mining company ArcelorMittal led the CAC into positive territory, rising 2.9%, followed by luxury good company Kering, public relations firm Publicis Groupe, and oil and gas company Total, which were up 2%, 1.9%, and 1.8% respectively. Energy management company Schneider Electric, and luxury goods company Louis Vuiton were up 1.8% and 1.7% respectively, while auto parts supplier Valeo rose 1.5%.