Tuesday, 08 September 2015 19:19
LONDON: Europe’s main stock markets surged higher Tuesday on upwardly revised eurozone economic growth data and gains in Shanghai, dealers said.
The 19-nation eurozone grew by 0.4 percent in the second quarter, official data showed, revising upward a first estimate of 0.3 percent that triggered worries the Greek financial crisis had destabilised growth in Europe.
“Eurozone growth in the first and second quarter was better than initially thought,” said analyst Craig Erlam at trading firm Oanda.
“Expectations were for the numbers to remain unchanged so this is likely to be helping to lift sentiment in Europe.”
London’s benchmark FTSE 100 index of top companies jumped 1.34 percent to stand at 6,156.12 points.
Frankfurt’s DAX 30 won 2.05 percent to 10,315.83 points and the Paris CAC 40 advanced 1.67 percent to 4,625.68 compared with Monday’s close.
The more upbeat data comes as concerns are growing about the global economy, hit by a slowdown in powerhouse China that has spooked financial markets.
– China boost –
But on Tuesday sentiment in Europe got a boost from China with a bounce in Shanghai deals as investors took mixed Chinese trade data in stride.
In Beijing the customs bureau said exports fell 5.5 percent year-on-year while imports plunged 13.8 percent, stoking worries about the nation’s economic slowdown.
While the export data was better than forecast and the import figure was affected by plunging commodity prices, the news remains a concern owing to China’s role as the world’s biggest trader in goods and a crucial driver of global growth.
“Equities (are) on the front foot again… thanks to mixed China data being taken positively,” said analyst Mike van Dulken at traders Accendo Markets.
“While exports were weak for a second consecutive month they were not as weak as expected — which plays in favour of global growth recovery hopes.”
Chinese stocks surged 2.93 percent Tuesday at the end of a day of wild swings into both positive and negative territory.
CMC Markets analyst Jasper Lawler noted that rebounding Chinese equities “helped ease concerns of an immediate return to plunging stock markets”.
In other Asian trading, Hong Kong recovered from a big morning loss to end up 3.28 percent, Sydney added 1.69 percent, while Singapore, Taipei and Wellington also enjoyed gains.
However, Japan’s Nikkei closed 2.43 percent lower, losing all gains made so far this year.
US equities jumped in opening trade Tuesday, adding to the global rally following strong gains in the volatile Chinese stock market.
Five minutes into trade, the Dow Jones Industrial Average gained 1.70 percent to 16,376.90 percent.
The broad-based S&P 500 climbed 1.67 percent at 1,953.39, while the tech-rich Nasdaq Composite Index advanced 1.94 percent to 4,774.57.
– French TV shares zapped –
In European company news on Tuesday, British insurer and takeover target Royal & Sun Alliance agreed to sell its Latin American operations to Colombian investment group Inversiones Suramericana.
RSA said in a statement it will sell its business in Latin America to Suramericana for £403 million (553 million euros, $ 618 million) in cash.
The London-listed insurance firm had last month received a £5.6-billion takeover approach from Swiss rival Zurich Insurance.
RSA’s share price gained 1.09 percent to 509 pence.
On the downside in Paris, shares in private French television channel TF1 were zapped by poor viewing figures and a relaxation of restrictions on advertising on its state-held competitors.
TF1 shares slumped 7.4 percent to 12.96 euros after French Finance Minister Michel Sapin added his voice to mounting calls to study changing restrictions on prime-time advertising on public television channels.
In foreign exchange trading, the euro crawled higher to $ 1.1181 in London from $ 1.1170 late in New York on Monday.
On the London Bullion Market, gold advanced to $ 1,120.77 per ounce from $ 1,122.67.
