European Stocks Track U.S. Futures Higher Amid Earnings Optimism

(Bloomberg) -- European equities rose on Monday, as investors weighed robust earnings reports and a brightening economic outlook against the risks of rising inflation and higher taxes. The U.K. market is closed for a public holiday.

The Stoxx Europe 600 Index climbed 0.4% as of 10:35 a.m. CET, tracking gains in U.S. index futures and moving closer to historic highs reached last month. Consumer products and technology were among the biggest advancers, with Hermes International, L’Oreal SA and LVMH leading.

Renewables dragged energy shares lower, after Citigroup Inc. said in a note that Siemens Gamesa Renewable Energy SA’s 2021 guidance was disappointing. Vestas Wind Systems A/S dropped by 3.4%.

The Stoxx 600 Index has climbed more than 10% this year, buoyed by expectations of rapid economic recovery, as vaccinations against the coronavirus progress while fiscal and monetary policy across the region remains loose. With much of the positive news already priced into lofty valuations, momentum has stalled in the past weeks, even as European companies are delivering one of the best earnings seasons on record.

“The ‘laissez-faire attitude of central bankers will not prevent long rates from rising,” Oddo strategist Sylvain Goyon wrote in a note on Monday. “This situation, current and past, is favorable to a reduction in the dispersion of expectations and therefore of a return of the preference for value.”

S&P 500 futures rose 0.4% and those on the Nasdaq 100 were 0.3% higher.

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