European shares advanced as commodity producers rebounded on higher metals prices.
The Stoxx 600 gained 0.6 per cent to 342.46 at 8:15 a.m. in London. BHP Billiton Ltd. and Glencore Plc led miners to the best performance of the 19 industry groups on the equity gauge. Sliding commodity producers had weighed on equities yesterday, erasing gains to leave them little changed amid speculation over a potential increase in U.S. borrowing costs this year.
Uncertainty over the timing of the next U.S. rate increase is exacerbating the concerns that have hit Europe this year. Italy is struggling to get to grips with a banking crisis, while faith in the efficacy of European Central Bank stimulus to spur growth amid political turmoil has faded. The Stoxx 600 last week posted its biggest weekly selloff since before the U.K. referendum on European Union membership.
Despite a rebound of as much as 12 per cent following the U.K. vote, the Stoxx 600 has lost 6.4 per cent in 2016, and strategists expect it to end the year down 8.6 per cent. At the same time, a Bank of America Corp. report showed investors have withdrawn money from the region’s funds for a record 28th straight week.