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European stocks recover towards the end of the day but close lower after miners decline

By Sruthi Shankar and Shreyashi Sanyal

(Reuters) – European stocks eased on Thursday, pressured by the fall of large miners following a slump in commodity prices, while rapidly rising inflation in the United States sparked some risk aversion.

* The Europe STOXX 600 Stock Index ended the day down 0.1% after earlier falling to 1.7%, moving further away from an all-time high.

* The core resources sub-index plunged 3%, leading declines in Europe’s equity segments, while the oil and gas indicator fell 1.4%. These areas had led the gains from a sharp rise in commodity prices.

* Automotive companies also lost 0.9%, while defensive economy companies’ stocks, such as public services, health and telecommunications stocks, rose.

* US inflation readings for April showed a sharp rise in prices, sparking fears that the Federal Reserve will raise interest rates earlier than expected. However, Wall Street managed to rebound during the day and tech stocks were gaining ground.

* “At some point the European markets had significant declines … inflation concerns again weighed on morale, but those declines were brief and we spent the rest of the day recovering what we lost,” said Michael Hewson, analyst Head of CMC Markets in London.

* European stocks rose to all-time highs this month and the STOXX 600 Index has gained nearly 9.5% so far this year amid a more positive outlook for economic recovery and strong results from companies that attracted investors.

* Among the relevant drops on Thursday, the British luxury chain Burberry sank 10% after reporting a decline in its annual sales, affected by the COVID-19 pandemic.

(Reports by Sruthi Shankar and Shreyashi Sanyal in Bengaluru. Edited in Spanish by Marion Giraldo)

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