Gains in Miners Prop Up European Stocks as Drugmakers Decline

  • Enel leads utilities higher on plans to dispose assets
  • Swatch, Richemont fall as Swiss watch exports tumble

Trump, China Push Metals and Miners Higher

Gains in miners pushed European equities to their highest levels in almost a month, mitigating a drag from drugmakers.

Industries perceived as benefiting from faster economic growth have led gains since Donald Trump’s U.S. election win on speculation he’ll boost fiscal spending. The moves continued on Tuesday, with gains in Anglo American Plc and BHP Billiton Ltd. helping a gauge of commodity producers extend its highest level since June 2015, while Roche Holding AG and Novartis AG tracked losses in U.S. health-care shares. Utilities bucked the trend as Enel SpA rose after announcing a plan to cut costs and dispose assets.

The Stoxx Europe 600 Index added 0.2 percent at the close, paring gains of as much as 0.7 percent as U.S. equities lost momentum following yesterday’s rally that sent all four major benchmarks to records. Still, the benchmark stayed in positive territory throughout the session, breaking a 10-day streak of intraday swings between gains and losses, the longest in more than three years.

“We’re continuing to see a post-U.S. election rotation into sectors, with the main winners being in materials, and financials,” said Guillermo Hernandez Sampere, head of trading at MPPM EK in Eppstein, Germany. His firm oversees $260 million. In Europe, “we’re still stuck in a trading range. If we manage to break through, we might see new highs for the year.”

The Stoxx 600 kicked off this year with a selloff it’s yet to recover from. The benchmark remains below levels seen before the U.K. referendum, and has dropped 6.8 percent since its 2015 close.

Among other shares active on corporate news:

  • Rotork Plc jumped 13 percent after forecasting annual revenue will be toward the upper end of analyst estimates.
  • Swatch Group AG lost 3.6 percent and Cie Financiere Richemont SA fell 3 percent as data showed the biggest monthly plunge for Swiss watch exports in seven years.
  • Banco de Sabadell SA dropped 4.4 percent after Colombian investor Jaime Gilinski, one of its largest shareholders, reduced his stake in Spain’s fifth-largest lender.
  • Essilor International SA plunged 6 percent after cutting its 2016 revenue estimates citing a slowdown in the U.S.
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