European Stocks Jump as Reddit-Fueled Silver Rally Boosts Miners

(Bloomberg) -- European stocks gained Monday following their biggest weekly drop in three months as Reddit-fueled short squeezes spread to commodities and lifted mining shares.

The Stoxx Europe 600 Index climbed 1.2% by the close in London, led by the technology sector. Basic-resources equities advanced as silver became the target of retail traders. Precious metals miners Fresnillo Plc and Polymetal International Plc jumped 9% and 5%, respectively.

Fresnillo, JD Sports Up; Varta, Unibail Fall: EMEA Equity Movers

Liberum strategist Joachim Klement said the move higher in silver may not hold if traders who use Reddit start to lose money on other positions. By shifting their investment focus to silver, they make it more likely that the GameStop “bubble will burst sooner and they start losing money,” he said in written comments. “At which point the silver push will fade as well.”

The broader benchmark fell more than 3% last week amid signs of international discord on vaccine distribution. In the latest developments, the European Union said AstraZeneca Plc will deliver 9 million additional doses to the trading bloc in the first quarter.

Vaccine news is “front and center” right now, Remi Olu-Pitan, head of multi-asset growth and income at Schroders Plc, said by phone. “Investors are a little bit concerned about the slow pace of the rollout across the European Union,” she said, “while we can see light at the end of the tunnel, that tunnel seems to be extending.”

Meanwhile, a busy week for corporate earnings is taking a back seat, according to Olu-Pitan. “Market attention is focused elsewhere,” she said, but added that if the current trend of companies beating expectations continues, then that will “provide a firm footing for investors to be more confident.”

Among individual stocks, Swedish lender Swedbank AB fell 4.3% as analysts predicted consensus downgrades on a net interest income miss, and Switzerland's Julius Baer Group Ltd. fell 2.1% after weaker flows at the money manager.

• You want more news on this market? Click here for a curated First Word channel of actionable news from Bloomberg and select sources. It can be customized to your preferences by clicking into Actions on the toolbar or hitting the HELP key for assistance.

©2021 Bloomberg L.P.