European Shares Climb on British Housebuilder Rally, Capped by Oil Prices
European shares rose on Monday, led by a surge in British housebuilders after the government confirmed it would revive an equity loan programme for first-time buyers. The pan-European STOXX 600 index climbed 0.48% to 641.73 points.
The rally in British housebuilders such as Persimmon, Barratt Redrow, Taylor Wimpey, and Vistry, which rose between 13.5% and 15%, helped boost the UK's blue-chip FTSE 100 index by 0.58%. However, gains were capped by a 3% jump in Brent crude prices after US President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz.
The surge in oil prices weighed on energy companies, with European energy stocks rising just 0.6%, while miners slumped 1.7% as precious metals fell due to a stronger dollar. Bond yields remained elevated, with Germany's 10-year government bond yield reaching its highest level since June 2009 at 3.6303%. Central banks have responded to oil-driven inflationary pressures with rate hikes.
Analysts expect companies to report stronger earnings next month as investors demand better results amid lingering geopolitical tensions. 'The bar has been raised, and the tolerance for disappointment is shrinking,' said Daniela Hathorn, senior market analyst at Capital.com.