Europe close: Stocks end higher as investors brush off concerns around Fed
European shares finished higher on Monday as investors appeared to shake off concerns of tighter US central bank policy.
The pan-European Stoxx 600 index ended up 0.70% at 455.23, having fallen in recent days after investors took a cautious turn when the US Federal Reserve shifted to a more hawkish position on interest rates last week.
Those concerns were fanned during the previous session by remarks from St.Louis Federal Reserve chief James Bullard, who said the central bank might need to start hiking rates in 2022 already.
"The US open has helped to lift sentiment throughout Europe, as markets fight back despite the ramp-up in fears over a ramp-up in hawkish sentiment throughout central banks," said IG chief market analyst Chris Beauchamp.
Also buoying sentiment, strategists at JP Morgan reiterated their call for a 50% jump in euro area companies' earnings per share in 2021.
In the corporate space, an unsolicited from US private equity outfit Clayton Dubilier & Rice sent stock of Morrisons soaring to 240.2p, or 35% above the offer price of 230p a share. The British firm rejected the offer, saying it undervalued the chain.
“The shares had previously fallen by 9% over the last year, contrary to the general market direction, and leading to relegation from the FTSE100 in March. Even so, the approach could stimulate some froth in the sector and even shake out other companies who are currently running the slide rule over UK plc,” said Interactive Investor head of markets Richard Hunter.
Supermarket and food supplier stocks rose on the news, with Sainsbury, Tesco, Ocado, B&M Value Retail, Carrefour, Colruyt, Axfood and Kerry Group all higher.
Travel-related stocks fell as the UK recorded more Covid-19 cases related to the Delta variant, which originated in India. Budget airlines easyJet and Ryanair were lower, along with holiday company TUI and Aeroports de Paris.
Nevertheless, according to the Prime Minister, the prospects for lifting most Covid-19 restrictions in England on 19 July were "looking good".
Shares in Italian-American vehicle maker CNH Industrial were lower after the company agreed to a deal to buy Raven Industries at an enterprise value of $2.1bn.