European stocks hover near record highs, Cineworld gains

(Reuters) -European stocks held close to record highs on Monday with technology stocks leading the charge, as investors counted on strength in corporate earnings to keep the market momentum going.

The pan-European STOXX 600 index rose 0.1% to 445.07 points, just below its record high of 446.19 points.

European technology stocks jumped 1%, while more economy-sensitive sectors such as banks and basic resources traded in the red.

“Our near-term focus on the reflation trade and sectors like energy and financials is not as interesting as the case for growth and technology,” said Mark Haefele, chief investment officer of global wealth management at UBS.

“Although global stocks are now around 20% above pre-pandemic highs, a combination of strong earnings growth and reasonable valuations relative to still-low bond yields points to further upside.”

Trading activity was subdued with markets in Austria, Denmark, Hungary, Norway, Switzerland and Germany closed for a holiday.

UK’s Cineworld Group Plc rose 3.2% after animated adventure comedy “Peter Rabbit 2: The Runaway” pulled in more people than expected after a months-long COVID-19 lockdown.

Helping sentiment, European Central Bank President Christine Lagarde said on Friday it was still too early to discuss policy after the end of its 1.85 trillion euro ($2.3 trillion) emergency bond purchase scheme.

Her comments followed calls by some colleagues to consider tapering. The central bank is set to meet early next month to discuss its policy.

The STOXX 600 ended last week marginally higher despite worries about inflation as a survey showed euro zone business growth accelerated at its fastest pace in over three years in May.

There were some concerns as Germany’s public health institute declared Britain and Northern Ireland a virus variant region, requiring anyone entering the country from the United Kingdom to quarantine for two weeks on arrival.

Italy’s FTSE MIB lagged as several stocks traded ex-dividend.

($1 = 0.8192 euros)

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