Monday 30 May 2016

European shares bounce back from lows despite China growth figures

Published 19/01/2016 | 09:44

Clocks showing the time of various international major cities (Photo by Ulrich Baumgarten via Getty Images)
Clocks showing the time of various international major cities (Photo by Ulrich Baumgarten via Getty Images)

European equities bounced back from 13-month lows on Tuesday, with mining and energy stocks leading the market higher after prices of major industrial metals and crude oil surged following the release of Chinese growth data.

The pan-European FTSEurofirst 300 index was up 1.4 percent by 0820 GMT after slipping to a 13-month low in the previous session.

The STOXX Europe 600 Basic Resources index, which houses major mining stocks, rose 4.1 percent, while the European oil and gas index was up 1.8 percent, tracking gains in prices of commodities such as oil, copper, nickel and aluminium.

Shares in Anglo American, Glencore, Rio Tinto and BP rose 2.5 to 8.9 percent after growth numbers from China, the world's top metals consumer.

Growth in China's fourth-quarter gross domestic product eased, as expected, to 6.8 percent from a year earlier, down from 6.9 percent in the third quarter and marking the weakest pace of expansion since the first quarter of 2009. Full-year growth of 6.9 percent was China's poorest in a quarter of a century.

"As figures weaken in absolute terms, we can potentially see additional stimulus measures. That is helping investors' appetite for risk," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels, said.

Credit Agricole rose 5.2 percent after the company confirmed a report that it was looking at the possibility of selling stakes in over three dozen regional banks, saying it would bolster its capital and help finance dividends.

Prudential was up 2.3 percent after the British insurer posted a slightly above-forecast capital ratio under new European rules.

There were strong gains across all European equity sectors, but Danish enzyme maker Novozymes fell 11.8 percent after trimming its longer-term sales forecasts.

Alstom fell 8.9 percent, its worst day in two years, with traders attributing the move to technical selling triggered by the company's 3.2 billion euro share buyback programme.

Reuters

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