European shares were slightly higher on Monday, having erased earlier declines as investors shrugged off weaker-than-expected China trade data and a profits warning from workspace provider IWG.
“European stocks are easing back from all-time highs, with commodity stocks leading the declines,” said Sophie Griffiths, OANDA’s Market Analyst for the UK & EMEA.
“The tailwind from the weaker-than-expected non-farm payroll report has faded, and sentiment has taken a turn for the worse following downbeat Chinese trade data.”
The pan-European Stoxx 600 index edged up 0.2% to 453.49 after hitting a record high on Friday. Investors were also eyeing critical US inflation data later this week.
Germany’s Dax was up 0.2% at 15,724.57, while Milan’s FTSE Mibtel was cimbing 0.88% to 25,797.31.
Mining stocks were weaker as lower-than-expected Chinese exports sparked concerns of weakening demand. Trade data for May showed that exports slowed more than expected, rising 27.9%, although imports rose to 51.1% from 43.1%.
According to economists at Pantheon Macroeconomics, Chinese exports were set to continue falling over the next few months given that they remained well above their pre-Covid-19 trends.
In equity news IWG was at the bottom of the pile on the Stoxx, down 13.15% after warning that underlying profit for 2021 is set to be “well below” the previous year’s level due to Covid-related restrictions in some of its markets, but reiterated its expectations for a recovery in 2022.
French vouchers and cards provider Edenred rose 3.62% after Deutsche Bank upgraded the stock to ‘buy’.
UK housebuilders all rallied on news that British house prices have risen to a new peak, as the stamp duty holiday and demand for larger houses after the pandemic continued to fuel the market.
Halifax bank reported that the average property now costs £261,743, with annual house price inflation at its strongest level in almost seven years based on its own index, which revealed the average price rose by 1.3% in May alone, and was 9.5% higher year on year than a year ago.
Persimmon, Vistry, Taylor Wimpey, Redrow and Bellway were all up by more than 2% on the news, along with a note from broker Liberum that saw more upside in the sector.
