European stocks started the week with modest gains as lower bond yields, a weaker US dollar and growing expectations that the Federal Reserve will hold interest rates steady supported market sentiment.
Mining shares were among the strongest performers. Basic resources stocks rose around 1.4%, helped by firmer metal prices and a softer dollar. Antofagasta, Hochschild Mining and Glencore gained roughly 2.2% to 2.7%.
The move followed a fresh reassessment of US interest-rate expectations. Softer employment data, inflation broadly in line with forecasts and a 0.6% fall in July retail sales increased expectations that the Federal Reserve will keep rates unchanged at its September meeting. Money markets were pricing in about a 70% chance of no change.
Lower rate expectations can reduce pressure on bond yields and the dollar. A weaker dollar can support commodity prices, particularly gold and other metals that are priced in the US currency. For European mining companies, stronger metal prices can improve the earnings outlook if operating costs remain under control.
Technology shares also moved higher, gaining around 1.1%. The sector tends to respond positively when markets expect lower or more stable interest rates because future earnings become more attractive when discount rates fall.
Energy stocks rose by around 0.3% as crude oil prices strengthened. Food and beverage shares moved lower, falling roughly 0.7%, showing that the wider market remained mixed despite stronger performance in selected sectors.
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