Europe stocks trade higher but miners take a hit

Big 5

European stocks were trading higher Tuesday morning although basic resources stocks were hit by declining metal prices.

The pan-European STOXX 600 index was trading 0.4 percent higher with all sectors in positive territory except for basic resources, which was down 2.5 percent.

Miners were among the worst performing stocks on the index with Antofagasta down 4.3 percent, Randgold Resources down a similar amount, Glencore down 3.2 percent and Rio Tinto, Fresnillo and BHP Billiton seeing similar declines.

The declines came amid falls in the price of precious metals. Gold prices are in focus for investors as markets continue to question the timing of the U.S. Federal Reserve’s next increase in interest rates. Gold prices tend to decline amid the prospect of higher interest rates. Spot gold was down 0.16 percent at $1,320 on Tuesday morning with other metals seeing similar declines.

European markets started the trading day on a shakier footing than their global counterparts. Asia markets saw a rebound on Tuesday as Japanese shares reversed early losses following the release of data on household spending, unemployment and retail sales.

U.S. markets, meanwhile, also closed higher on Monday as investors looked ahead to key jobs data due on Friday that are expected to influence the U.S. Federal Reserve’s next rate hike – which could come in September.

Fed chair Janet Yellen gave a speech last Friday at the economic symposium in Jackson Hole, Wyoming, in which she was positive on the outlook of the U.S. economy but added that the Fed is closely watching non-farm payroll data as a key indicator of the health of the U.S. economy.

In business news, shares of Hershey fell sharply in after-hours U.S. trade after rival Mondelezsaid it was walking away from takeover talks, having failed to agree on a price for the chocolate maker.

Meanwhile in Europe, the European Commission will rule against Ireland’s tax dealings withApple on Tuesday, two sources familiar with the decision told Reuters, one of whom said Dublin would be told to recoup over 1 billion euros in back taxes.

There are no major earnings or data releases Tuesday.

Source: CNBC