Stocks

European shares bounce on Chinese export data, steadying yuan

Reuters Aug 8 | Updated on August 08, 2019 Published on August 08, 2019

The pan-European STOXX 600 index was up nearly 1 per cent, with more than 91 per cent of the companies on the index in positive territory, recovering from a three-day rout that began late last week. File Photo   -  Reuters

European shares rose for a second day on Thursday, as investors took heart from a stronger-than-expected rebound in Chinese exports and steadying of the yuan after a week of turmoil sparked by an escalation in US-China trade tensions.

The pan-European STOXX 600 index was up nearly 1 per cent, with more than 91 per cent of the companies on the index in positive territory, recovering from a three-day rout that began late last week.

Trade-sensitive tech and basic resources indexes led the gains, with no sector in the red.

Data showed July exports in China rose 3.3 per cent from a year earlier, the fastest since March, overturning analyst forecasts for a 2.0 per cent drop. Imports fell almost 6 per cent although that was not as bad as a consensus forecast for an 8.3 per cent drop.

The yuan recovered some ground against the dollar, although China's central bank set its official midpoint below the seven to the dollar threshold for the first time since the global financial crisis.

“The yuan fixing was an important signal from China that investors are taking comfort from and it was also a move to prohibit capital outflows from China,” said Teeuwe Mevissen, Senior Market Economist at Rabobank.

Fears the US-China trade war may tip the world into recession have pushed investors to pile into bonds and gold and prompted central bankers around the world to get ahead of the storm clouds by easing monetary policy.

Earnings from German companies were in focus with disappointing second-quarter sales from sportwear firm Adidas , sending its shares down 1.5 per cent, while Thyssenkrupp gained 2 per cent in the face of a fourth profit-warning that traders said was already largely priced in.

Lighting group Osram was the biggest decliner on STOXX after its top shareholder rejected a 3.4 billion euro ($3.81 billion) takeover offer from private equity firms Bain and Carlyle.

London's FTSE 100 lagged as a rising pound pressured the index, which is packed with exporters. Hargreaves Lansdown, however, jumped 6 per cent after the British fund supermarket posted a forecast-beating increase in full-year assets.

Published on August 08, 2019
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