Wednesday 18 July 2018

European stocks jump on optimism over China

Traders work at the post where Peabody Energy is traded on the floor of the New York Stock Exchange. Photo: Reuters
Traders work at the post where Peabody Energy is traded on the floor of the New York Stock Exchange. Photo: Reuters

Europe's equities are on track for their biggest rally in a month on optimism that China's economy is stabilising.

By mid-afternoon in Dublin, the ISEQ Overall Index was up 2pc, or 125.58 points, to end the trading session at 6,298.74.

The leaders on the Dublin market by mid-afternoon included Paddy Power Betfair, which increased 3.8pc to €120.85, while packaging giant Smurfit Kappa increased by 3.1pc to €24.14.

On the other side of the board, the laggards included Dalata, which slipped 0.4pc to €4.59, while Glanbia had fallen 0.1pc to €17.52.

Elsewhere, the Stoxx Europe 600 Index climbed 2.3pc at 3:08pm in London, with more than 500 of its members rallying.

The gauge is extending a rebound after posting four consecutive weeks of losses, the longest run since 2014.

Commodity producers - one of the only industry groups up for the year - led gains after data showed that China's exports jumped the most in a year and declines in imports narrowed.

The UK market, rich in miners, advanced, with the FTSE 100 Index turning positive for the year.

Lenders, which suffered the most in the first quarter, headed for their biggest four-day rebound in almost two months.

"It seems investors' appetite is coming back," said Benno Galliker, a trader at Luzerner Kantonalbank in Lucerne, Switzerland.

"The commodity sector is well supported after the good numbers out of China, and the talks getting close to a solution in Italy give a little support to the market too."

Britain's FTSE 100 has been Europe's market leader this year, helped by the surge in commodity companies and a weaker pound. It joined developed markets from New Zealand, Canada and the US in erasing annual losses.

The benchmark index advanced 1.7pc yesterday afternoon, with Anglo American, Rio Tinto Group and BHP Billiton up more than 5.8pc. Lenders Standard Chartered and Barclays also rallied more than 5.8pc.

Berkeley Group Holdings rose 2.8pc after London's biggest home builder won approval to develop as many as 652 homes at a parking lot in the west of the city.

Italy's FTSE MIB Index was the biggest gainer among major markets in western Europe, up 3.7pc. Banca Monte dei Paschi di Siena SpA, Banca Popolare dell'Emilia Romagna and UniCredit rallied more than 8.8pc.

The nation came up with a plan to help the troubled firms, which led the industry down at the beginning of the year.

France's Societe Generale and Deutsche Bank also jumped.

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