Iron ore slump presses mining stocks European stocks rise cautiously to catch up with US stocks

European stock markets edged higher on Monday. Investors are cautious amid concerns about inflation and the collapse in some commodity prices.

As of 17 / 44 domestic time, the FTSE 100 index in the UK and the CAC index in France were up 0.19% and 0.15% respectively. Germany, Switzerland, Denmark, Belgium and Austria are closed today for public holidays.

The cryptocurrency market calmed down a bit after a tumbling weekend. Bitcoin fell as much as 16% to $31000 on Sunday and rebounded to $37000 today. The latest sell-off comes as Chinese officials renewed their crackdown on bitcoin mining and trading to put an end to related financial risks.

Bitcoin has fallen 40 per cent since it reached an all-time high of $64000 last month. Other cryptocurrencies also fell. "after reaching a multi-month low last week, some indicators reached a tipping point and traders needed to decide whether to stop their losses, and the previous speculative frenzy was almost gone," said IG's Kyle Rodda. "

In spite of this, the British stock market opened higher today. Shares of Aveva, an industrial software company, rose 1.5 per cent, telecom operators Vodafone and BT rose 1 per cent, and pharmaceutical company Hikma rose 1 per cent. Among the decliners, precious metals miner Fresnillo led the decline, falling 2 per cent, while copper maker Antofagasta also fell 1 per cent.

As the recent volatility in the US stock market has intensified, some investors have turned their attention to European stock markets. European equity funds have recorded their longest net inflows in more than three years, according to EPFR. According to a survey of global fund managers by Bank of America (42.4, 0.53, 1.27%), their current allocation of European equities is the highest since March 2018. Morgan Stanley (88.34, 1.87, 2.16%) strategists say holding European stocks is their priority.

As a result, European stock markets began to catch up after falling behind the US stock market for many years. The pan-European 600 index is up 10.7% so far this year, on a par with the s & p 500.

Many European stocks are more attractive than the US stock market. According to Refinitiv Datastream, the price-to-earnings ratio of the S & P 500 is close to 21, while the price-to-earnings ratio of the pan-European 600 index is 16.7, which is higher than the average over the past decade.

"We have held more U.S. stocks in the past few years, and now we are more interested in stocks in other countries," said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management. " "vaccination is accelerating and you may see more blockades lifted, which means a better economic recovery is being injected into the eurozone market."

Mona Mahajan, senior US investment strategist at Allianz Global Investment, said: "the story of the first few months of this year revolves around the'US exception'. In the next three to six months, this is likely to dissipate with the follow-up of Europe. "