Europe midday: Shares rebound despite plunge in metals, oil prices

(Sharecast News) - European shares rebounded from a rocky start on Monday amid a continuing rout in metals and oil prices as US tensions with Iran eased and the dollar strengthened.

The pan-regional Stoxx 600 index was up 0.3% to 612 at 1157 GMT having been down 0.27% in early deals. Germany's DAX outperformed with a 0.71% rise.

Metals prices continued their slump on Monday, with gold, silver and copper all continuing their slide from record highs last week due to profit taking and a stronger dollar, while oil prices also fell sharply after an easing in tensions between Iran and the US.

Gold was down 6.66% to $4,568 an ounce, after plunging almost 10% on Friday to below $5,000. Silver was down 10.36% to $76.41 after investors had pushed it to $120.

Copper was down 3.56% to $12,653 a metric tonne on the back of concerns around high inventories and weak demand ahead of China's Lunar New Year break, while platinum nosedived by 8% to $1,987 an ounce after last week's record of $2,918.

The sell-off appeared to be assisted by Trump's nomination of Kevin Warsh - seen as a policy hawk- to head the Federal Reserve, which led to the dollar strengthening to $1.36 against the pound and $1.18 versus the euro.

Oil prices were pressure on Monday after US President Donald Trump said over the weekend that Iran was "seriously talking" with Washington, easing fears of conflict with a major producer that had sparked supply fears. Brent crude was down 4.49% to $66.21.

"Mining stocks are likely to feel the heat as metal prices scramble to find a floor. Oil prices are also trending the wrong way for investors in commodity focussed companies," said Hargreaves Lansdown analyst Derren Nathan.

"The silver bubble well and truly popped on Friday after lenders upped their margin calls to speculators. That followed Donald Trump's nomination of Kevin Warsh, one of the more hawkish contenders in the race, for the top job at the Federal Reserve bank."

"There's no sign of a silver lining this morning either, with another double-digit decline showing on traders' screens. Gold is following a similar but far less pronounced pattern. In industrial metals, Copper has also seen a flight of speculative funds, although here, the long-term demand runway combined with limited new production set to come on stream should provide some support."

The news sent share prices in metal miners lower, with Endeavour, Rio Tinto, Fresnillo, Glencore, Anglo American, Antofagasta, Atalaya Mining Copper, Hochschild and Pan African Resources all down. Oil producers were in the doldrums too as BP, Shell, Harbour Energy and Ithica Energy declined.

On the upside, shares in jeweller Pandora surged on weaker silver prices. The company uses recycled silver as a key raw material for its products.

Reporting by Frank Prenesti for Sharecast.com