(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window)
* Commodity stocks lead recovery
* Q2 STOXX 600 earnings set to jump 108%
* Global investors await Fed minutes (Adds comment, updates prices)
July 7 (Reuters) – European stocks gained on Wednesday as commodity-linked stocks recovered from sharp falls in the previous session, while lower bond yields continued to support highly-valued technology shares.
The pan-European STOXX 600 rose 0.5%. The index snapped a three-day winning streak on Tuesday on a sharp drop in U.S. and euro zone bond yields due to concerns about global economic recovery.
Yields resumed their slide on Wednesday, lifting technology stocks by 1%. Miners, oil & gas and construction companies rose between 0.9% and 1.3%.
A rally in beaten-down “value” stocks has helped push the STOXX 600 to record highs this year, but recent worries about the Delta variant of COVID-19 slowing economic recovery have put them behind “growth” stocks in year-to-date performance.
“The potential for a hiccup in global growth, a shift in tone by major global central banks and unresolved pandemic uncertainties raise near-term risks for European cyclicals, especially given that they are expensive,” analysts at BCA Research wrote in a note.
Investors are awaiting the U.S. Federal Reserve’s policy minutes later in the day, which could shed light on its plan to taper asset purchases.
UK-listed oil major Royal Dutch Shell rose 2.3% after it said it would boost its returns to shareholders via share buybacks or dividends.
German software company SAP climbed 3.2%, with traders pointing to a double upgrade to “buy” from Bank of America as the reason for the move.
French state-controlled power group EDF added 2.0% after raising its 2021 EBITDA target, given its new estimate for nuclear output in France.
With earnings season set to kick off later in July, analysts are expecting profits at STOXX 600 companies to jump 108.6% in the second-quarter versus a year ago, as per Refinitiv IBES data.
Swiss duty-free retailer Dufry pared gains after Italy’s Autogrill denied rumours of a potential tie-up with the former company.
Dufry was up 2.5% after gaining as much as 5% earlier, while Autogrill shares were up 2.4%.
Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and Uttaresh.V
