Europe close: Markets rise despite sliding metal prices
By Josh White
Date: Monday 02 Feb 2026
(Sharecast News) - European equities rebounded from early losses on Monday, shrugging off a continuing rout in metals and oil prices as geopolitical risk premia eased and the dollar strengthened.
The pan-European Stoxx 600 rose 1.02% to 617.23, with Germany's DAX up 1% at 24,784.92, France's CAC 40 gaining 0.67% to 8,181.17 and the UK's FTSE 100 advancing 1.15% to 10,341.56.
Commodity-linked sectors lagged as metals prices extended their slide from last week's record highs on profit taking and a firmer dollar, while oil fell sharply after signs of de-escalation between the US and Iran.
Russ Mould, investment director at AJ Bell, said "commodities markets have experienced a significant shockwave, with metal prices down sharply," noting that the sell-off had "reversed a winning trade for the plethora of commodity producers on the FTSE 100."
The move was reinforced by US president Donald Trump's nomination of Kevin Warsh, seen as a policy hawk, to lead the Federal Reserve, which helped lift the dollar.
Mould said Warsh's appointment had "surprised the market," adding that his perceived hawkish stance and support for Fed independence had helped the US dollar regain strength, a development that "makes gold more expensive for buyers using other currencies, thus dampening its appeal."
Oil prices were also pressured after Trump said Iran was "seriously talking" with Washington, easing fears of disruption from a major producer.
"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 Derren Nathan, analyst at Hargreaves Lansdown.
He added that "the silver bubble well and truly popped on Friday after lenders upped their margin calls to speculators," noting further that there was "no sign of a silver lining this morning either," with silver seeing another double-digit decline, gold following a milder pattern and copper hit by speculative outflows despite longer-term supply constraints.
Mould noted that copper and oil had also fallen, warning that miners often amplify moves in underlying metals, with the sector typically "underperforming falling gold and silver prices."
He also pointed to higher margin requirements on gold and silver futures imposed by CME as a factor potentially "forcing out speculators" and accelerating the sell-off.
Economic data paints mixed regional picture
Economic data were mixed across the region.
Eurozone manufacturing showed tentative improvement in January, with the HCOB manufacturing PMI rising to 49.5 from December's 48.8, edging above forecasts but remaining in contraction territory.
The output index moved into expansion at 50.5, though new orders fell, job losses persisted and input cost inflation hit a three-year high.
Germany's PMI improved to 49.1, Spain and Italy remained below 50, while France jumped to a 43-month high of 51.2.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said progress was "happening at a snail's pace" and that the uneven picture was "not exactly laying the groundwork for a sustained upswing."
In Germany, retail sales rose 0.1% month on month in December, slightly below expectations, while full-year 2025 sales increased 2.7% in real terms, with momentum slowing in the second half of the year after a one-off boost earlier in 2025.
UK data was more supportive.
Manufacturing growth hit a 17-month high in January, with the PMI rising to 51.8, signalling a third straight month of expansion and improved export demand.
Business optimism climbed to its highest level since before the 2024 Autumn Budget, while the pace of job cuts slowed.
Patrick Munnelly, market strategy partner at TickMill, said investors were increasingly favouring defensives, with the FTSE 100 "posting modest gains on Monday as investors shifted their focus to defensive sectors like pharmaceuticals and consumer staples amid a global downturn in energy and metal stocks."
Separately, UK house price growth cooled to 0.6% in December from 1.8% in November, the slowest pace since April 2024, with the average price at £271,068.
Nationwide said the market remained resilient through 2025, while the Bank of England was expected to hold rates at 3.75% this week.
Munnelly added that policymakers faced limited clarity on the timing of future rate cuts as inflation remained under close scrutiny.
Global sentiment was also shaped by mixed signals from China.
The private-sector RatingDog manufacturing PMI rose to 50.3 in January, the highest since October, indicating modest growth, while the official PMI slipped back into contraction.
Lynn Song, chief economist for Greater China at ING, said the divergence suggested external demand remained stronger than domestic activity, a view echoed by RatingDog founder Yao Yu, who warned profit margins could stay under pressure if costs remain elevated.
Miners in the red as metal prices fall, Pandora rises
In equities, miners fell sharply as metal prices slid, with Endeavour Mining, Fresnillo, Glencore, Anglo American, Antofagasta, Atalaya Mining Copper, Hochschild Mining and Pan African Resources all lower.
Munnelly noted that the precious metals mining sector dropped to a three-week low.
Oil producers also underperformed, including BP, Shell, Harbour Energy and Ithaca Energy, with Munnelly noting that easing geopolitical tensions had pulled energy stocks down.
On the upside, shares in Danish jeweller Pandora surged 9.16% on weaker silver prices, while semiconductor names ASML Holding and BE Semiconductor Industries posted modest gains.
Reporting by Josh White for Sharecast.com.
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