Europe close: Gains in basic resources prop up market gauges

European stocks were little changed on Monday as investors awaited a speech by Federal Reserve chair Janet Yellen for further clues on monetary policy after Friday’s dire payrolls report.

The benchmark DJ Stoxx Europe 600 index edged higher by 0.33% or 1.12 points to end at 342.41, Germany’s DAX was up by 0.18% to 10,121.08 and France’s CAC 40 by another 0.04% to 4,423.38.

At the same time, crude oil prices rose, underpinned by attacks on Nigerian energy infrastructure. West Texas Intermediate was up 1.34% to $49.28 a barrel and Brent crude was up 1.06% at $50.17.

After the close of trading in London, Yellen told the World Affairs Council of Philadelphia’s luncheon that further gradual interest rate increases in the US were likely to be appropriate, but demured from providing any exact guidance as to the timing of the next move.

"If incoming data are consistent with labor market conditions strengthening and inflation making progress toward our 2% objective, as I expect, further gradual increases in the federal funds rate are likely to be appropriate and most conducive to meeting and maintaining those objectives," Yellen said.

Ahead of Yellen’s speech, investors mulled over comments from Boston Fed President Eric Rosengren speaking in Finland. He said a rate hike was still likely, albeit not this month, despite the weak jobs report. Rosengren said it was important to wait and see whether the payrolls report was a reflection of a broader slowing in labour markets or just an anomaly.

In terms of sector, basic resources racked up healthy gains amid stronger metals prices, with the Stoxx 600 sub-index for the sector up 4.6% by the closing bell. Mining stocks pushed higher despite the dollar regaining ground against major rivals as the pound was weighed down by Brexit polls showing growing support for the Leave campaign and the yen slipped as Japanese officials talked the currency down.

Among individual stocks, Vodafone edged up after announcing the formation of a non-equity partnership in Zambia with Afrimax Group.

EasyJet was a little weaker, however, after reporting a 5.7% jump in passenger numbers in May despite 173 cancellations due to French air traffic control strikes and weather conditions.

Earlier, data released by Destatis showed manufacturing orders in Germany fell much more than expected in April.

Factory orders slumped 2% in April from the previous month, which was a much steeper drop than the 0.6% economists had been expecting

However, the figures for March were revised to show a 2.6% increase, up from the 1.9% initial reported.

On the year, manufacturing orders were down 0.5%.