UPDATE 1-Miners lift European shares as silver becomes latest retail play

  • Reuters
  • Stock Market News
UPDATE 1-Miners lift European shares as silver becomes latest retail play
Credit: © Reuters.

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* Fresnillo , Polymetal , Boliden jump

* Retail frenzy shifts focus to silver

* Ryanair sees record annual loss, shares fall

(Adds comments, bullets, background; Updates prices throughout)

By Shreyashi Sanyal

Feb 1 (Reuters) - European shares jumped on Monday, bouncing from their worst weekly decline since October powered by a rise in shares of miners after an ongoing retail frenzy shifted its attention to silver.

The pan-European STOXX 600 index .STOXX rose 1.1%, with shares of miners including Fresnillo FRES.L , Polymetal International POLYP.L and Boliden AB BOL.ST jumping between 5% and 20%.

Silver has become the latest focus of a frenzied online movement by retail investors to push up values of assets that big fund managers had bet against. Silver prices surged to an eight-year high on Monday. European basic resources index .SXPP jumped 2.4%, on track for its best day since early January.

"What we are seeing is an aggressive move higher on silver, which has obviously propped up the mining sector," said David Madden, market analyst at CMC (NS: CMC ) Markets UK.

"Financial markets and regulators are also a lot more comfortable with the rise in a commodity like silver, whose price is a lot harder to influence as opposed to a stock," said Madden.

All major European regional indexes were higher in early trading, with Britain's FTSE 100 .FTSE up 0.9% and German shares .GDAXI adding 1.4%.

Data showed German retail sales plunged far more than expected in December as a decision to tighten lockdown measures during the COVID-19 pandemic choked consumer spending in Europe's largest economy. STOXX 600 had logged declines of over 3% in the previous week, on concerns around the slow roll-out of COVID-19 vaccines and as a retail trading frenzy led to a rise in volatility.

Among other stocks, Ryanair RYA.I shed 2% after saying it expects to lose close to 1 billion euros in its current financial year, by far its worst ever performance. Sports Fashion JD.L jumped 6% as it said it would buy Baltimore-based DTLR Villa LLC for $495 million. WORRIES

Concerns around the potential economic damage from a new strain of the coronavirus in Europe and delays to vaccine roll-outs have hurt sentiment in the past few sessions as Europe urgently needs more shots to speed up its inoculation programme.

AstraZeneca AZN.L , Pfizer Inc (NYSE: PFE ) PFE.N and Moderna Inc MRNA.O have been facing difficulties in delivering the shipments to the bloc.

"While the number of new COVID-19 cases has stabilised somewhat, the focus is now increasingly shifting towards the race to get people vaccinated ... and the campaign is making slow progress in Europe," said Milan Cutkovic, market analyst at Axi.

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