European stocks extended gains on Tuesday after posting their best session in four months a day earlier, as gains in shares of oil and utility companies helped counter losses in miners.
The pan-European STOXX 600 edged 0.3% higher after opening lower, with energy and utility sectors rising more than 1.5% each.
Danish jewellery maker Pandora (OTC:PANDY) A/S jumped 7% to the top of STOXX 600 after reporting a 12% rise in organic sales in February.
The continent’s stock markets have come under pressure as a jump in bond yields on the back of quick vaccine rollouts and a massive U.S. fiscal package has fanned worries about a potential rise in inflation. Still, major European indexes have fared better than some of their tech-heavy U.S. peers.
“European market is much less tech heavy than the S&P 500, much less growth dominated, so higher bond yields are not such a negative,” said Nick Nelson, head of European equity strategy at UBS.
“The speed of the move has been an issue … if we’re talking about a gentle rise in yields from here on, then that’s more manageable, and more cyclical parts of the market such as Europe would do better.” The MSCI Europe value index, which includes banking, energy and auto stocks, have risen about 9% so far this year, while its growth counterpart that tracks tech and healthcare stocks is up just 0.9%.
Miners fell 1% as Dalian iron ore futures tumbled by the 10% daily limit on anti-pollution restrictions in China’s top steelmaking city of Tangshan, while metal prices were also hit by a firm dollar.