European stocks rose on Monday, led by cyclical stocks, following strong industrial production data from Germany, although there was cautious sentiment ahead of the European Central Bank’s (ECB) monetary policy decision this week.
The pan-European STOXX 600 index closed 0.47% higher at 508.93 points, with Germany’s DAX marginally outperforming most of its regional peers.
Data showed that German industrial production grew more than expected in February, led by the construction sector.
Cyclical sectors, including automotive and industrial goods and services, gained 1.3% and 0.8%, respectively. The basic resources sector recorded a 2% increase, also supported by the price of copper, which reached its highest level in 14 months.
Analysts, however, adopted a cautious tone.
“Today’s data gives hope that the German economy will not contract again in the first quarter,” wrote Ralph Solveen, senior economist at Commerzbank.
“However, a sustained recovery is not expected to take hold until the second half of the year. It is also expected to be rather moderate, as it will receive little support from monetary policy and will be held back by numerous structural problems.”
German 10-year government bond yields hit a two-and-a-half-week high ahead of the ECB’s interest rate decision on Thursday, after last week’s positive U.S. jobs data led to bets on rate cuts. lower interest rates this year.
As investors widely expect the ECB to maintain the deposit rate, they will be looking for any hint that a first cut of 25 basis points could be made in June.
IN LONDON, the Financial Times index advanced by 0.41%, to 7,943.47 points.
IN FRANKFURT the DAX index rose by 0.79%, to 18,318.97 points.
IN PARIS, the CAC-40 index gained 0.72%, to 8,119.30 points.
IN MILAN the Ftse/Mib index grew by 0.90%, to 34,315.96 points.
In MADRID, the Ibex-35 index recorded a decline of 0.04%, to 10,911.80 points.
In LISBON the PSI20 index increased by 0.75%, to 6,265.47 points.
Source: Terra
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