European Shares Inch Higher On Economic Optimism

European stocks edged higher on Tuesday, as cyclicals gained ground on optimism around a steady economic recovery.

Underlying sentiment was also underpinned after the European Commission said that its economic sentiment indicator increased sharply in June to hit a 21-year high, driven mainly by a strong increase in confidence in the services sector.

Another survey showed French consumer sentiment strengthened to a 15-month high in June.

The U.S. dollar rose against a basket of currencies as hawkish remarks from the U.S. Federal Reserve policy makers supported prospects of a tightening of monetary policy sooner rather later.

Richmond Fed President Thomas Barkin said on Monday that the central bank has made “substantial further progress” toward its inflation goal so as to begin the withdrawal of stimulus.

The pan European Stoxx 600 inched up 0.2 percent to 455.94 after declining 0.6 percent on Monday. The German DAX climbed 0.6 percent, France’s CAC 40 index edged up 0.3 percent and the U.K.’s FTSE 100 was up 0.2 percent.

Banks rose broadly, with Deutsche Bank, BNP Paribas, Credit Agricole, Societe Generale and Barclays all climbing about 1 percent on economic optimism.

French drug maker Sanofi was little changed after announcing it would invest about 400 million euros annually to accelerate research and development of next generation vaccines by launching mRNA Center of Excellence.

Rexel SA, a distributor of electrical supplies, jumped 5 percent after raising its sales outlook for full-year 2021.

Food and beverages company GEA Group AG gained 0.8 percent. The company has agreed to sell its refrigeration contracting operations in Spain and Italy to Clauger.

Housebuilder Persimmon advanced 1.3 percent in London, Taylor Wimpey added 0.6 percent and Barratt Developments rose half a percent after a survey showed U.K. house prices grew 13.4 percent on a yearly basis in June, the biggest outturn since November, 2004.

Oil rig construction company Lamprell slumped 22 percent. The company has warned of liquidity constraints and funding needs after posting a narrower loss for the full year 2020.

Energy services provider Hunting Plc declined 1.5 percent after issuing a pre-close trading update ahead of its half-year results.

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