European stocks post seventh month of gains

European stocks post seventh month of gains
European stocks post seventh month of gains

The European stock market fell today as a jump in inflation raised tensions over a possible shift in monetary policy, but despite that, it ended the month with gains of about 2%, supported by strong quarterly earnings for companies and optimism for an economic recovery.

The pan-European Stoxx 600 index closed down 0.4% but posted its seventh straight month of gains, its best monthly streak since 2013.

The technology sector, the best performer in August, came with a 6% rise, supported by strong profits for a few companies, while an increase in global infections with Covid 19 also prompted investors to buy shares of sectors that are more resilient to the pandemic.

European shares gave back their initial gains after data showed that euro zone inflation jumped to a 10-year high in August and that further increases expected are likely to challenge the European Central Bank’s moderate view on price growth.

Shares of basic resources companies were the top losers in August, falling 4.2%, as sharp fluctuations in metal prices prompted investors to withdraw from the sector, which has shown a good performance since the beginning of the year.

Travel and leisure stocks fell 0.7% after European Union governments agreed to remove the United States from the bloc’s list of safe travels.

Analysts expect European stocks to consolidate around their current record levels for the remainder of 2021 supported by solid corporate earnings, but say worries about US monetary policy tightening, Germany’s elections and a tough Chinese regulatory crackdown will limit gains.

To that, the decline in technology shares pressured “Wall Street” at the opening yesterday, while the main indices are heading to record gains for another month, following the lenient stance of the Federal Reserve on massive asset purchases.

The Dow Jones Industrial Average fell 8.46 points, or 0.02%, to 35,391.38 points.

The Standard & Poor’s 500 Index increased 0.96 points, or 0.02%, to 4529.75 points.

The Nasdaq Composite Index lost 3.01 points, or 0.02%, to 15,262.88 points.

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