European shares hit five-week

European shares hit a five-week high on Monday, helped by positive news on names like Metro and Deutsche Bank and as better-than-predicted Chinese growth data and hopes of more stimulus there improved sentiment.

The pan-European FTSEurofirst 300 index rose 0.4 per cent to 1,441.19 points by 0812 GMT after rising to 1,446.91 points, the highest level since early September.

European stock index futures earlier indicated a slightly lower open for the market after data showed China’s economic growth dipped below 7 per cent for the first time since the global financial crisis, hurt partly by cooling investment.

But analysts said that investors were looking at the positive side, with the growth numbers coming slightly better than forecasts and pressure on Beijing to further cut interest rates and take other measures to stoke activity.

“Figures out of China are mixed. However, at this point in time, news that is not exceptionally bad or deteriorating is probably perceived as good,’’ Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, said.

“Markets are in a more optimistic mood as more stimulus out of China is expected.’’

China’s factory output in September rose 5.7 per cent from a year ago, against forecasts for a 6 per cent rise. September retail spending bucked the cooling trend, growing at an annual rate of 10.9 per cent and beating a 10.8 per cent forecast.

“There is quite some relief that the panic seen in July and August concerning a sharply slowing Chinese economy hasn’t materialised, instead it appears that the service sector was able to compensate for some of the slack seen in manufacturing,’’ said Markus Huber, senior analyst at Peregrine & Black.

German shares outperformed other major indexes, with Metro rising 3.6 per cent, the top gainer in the FTSEurofirst 300 index, after saying it was optimistic about Christmas trading after like-for-like sales rose 1.3 per cent in the final quarter of its fiscal year.

Deutsche Bank rose 3.2 per cent after news that the lender is splitting its investment bank into two separate units and is removing three of its eight top executives as part of a broad strategic overhaul.

The Frankfurt DAX index was up 0.7 per cent, while France’s CAC rose 0.3 per cent and Britain’s FTSE 100 index was down 0.1 per cent.

Shares in Germany’s Wincor Nixdorf surged 15.7 per cent as US automated teller machine maker Diebold agreed to buy the company for €1.7 billion ($1.9 billion).

Miner Anglo American fell 4 per cent, the top decliner in the FTSEurofirst 300 index, on a cut in its target price by HSBC and concerns about metals demand in top consumer China.

The European mining index fell 1.3 per cent, tracking a decline in the prices of major industrial metals.

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