UPDATE 1-Industrials, banks lift European shares as reflation trade heats up
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* Economically sensitive stocks lead early gains
* Germany’s DAX up ahead of inflation data
* London midcaps rise as house prices jump
* France’s Rexel jumps on raising 2021 sales forecast (Adds comments; updates prices)
June 29 (Reuters) – A jump in industrial and financial stocks lifted European shares on Tuesday as investors bought into sectors set to benefit from a steady economic recovery, while France’s Rexel rose on lifting its 2021 sales forecast.
The French electrical parts supplier jumped 3.2% to the top of the STOXX 600 and said it expected same-day sales growth of between 12% and 15%, compared with its previous forecast of between 5% and 7%.
The pan-European STOXX 600 was up 0.5%, with industrials, banks and retail gaining between 0.4% and 1.1%.
Optimism around a steady economic recovery has put the European benchmark on course for its fifth straight month of gains, but it has recently struggled to break above its all-time closing high hit on June 16 on concerns of the global spread of the Delta variant of the coronavirus.
Travel-related European stocks steadied on Tuesday after their worst session in more than a month following reports of a potential ban on UK travellers in Germany, while Spain tightened travel rules for British tourists coming to the country.
“Concerns (are) growing that the race between the vaccine and the virus is being lost,” said Michael Hewson, chief market analyst at CMC Markets UK.
Focus on Tuesday will be on euro zone economic sentiment, which is expected to improve from a three-year high hit last month as the economy reopened from coronavirus-induced lockdowns, although the data will not reflect the recent spread of the Delta variant.
With fears of rising inflation also denting the appeal of risky equities this month, investors will look for consumer price inflation data from Germany around 1200 GMT.
The German bourse rose 0.7% by 0811 GMT, outperforming its European peers.
London’s domestically focussed FTSE 250 index added 0.5%, while housebuilders jumped 1.7% as data on Tuesday showed British house prices jumped by the most in more than 16 years in June.
Mining stocks were flat after outperforming last week on the back of the so-called reflation trade.
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