Stocks

Oil firms, miners lift European shares on upbeat China data

Reuters May 15 | Updated on May 15, 2020 Published on May 15, 2020

The pan-European STOXX 600 rose 1 per cent.File Photo   -  Reuters

German economy suffers worst contraction since 2009 in Q1

European shares rose on Friday, with miners and energy firms gaining after China reported its first monthly rise in factory output this year, but concerns about global economic recovery kept stocks on course for weekly declines.

The pan-European STOXX 600 rose 1 per cent. Miners, exposed to the health of the world's second-largest economy, jumped 3.7 per cent after data showed China's industrial production climbed at a faster-than-expected 3.9 per cent in April.

A surge in oil prices amid signs that demand was picking up helped add 2.2 per cent to the oil & gas index.

Global stock markets have slid this month after a solid recovery in April on fears of a possible resurgence in COVID-19 cases as economies ease restrictions. The STOXX 600 is set for its biggest weekly drop since the height of mid-March selling.

“The market is torn between stimulus, new infections and economic data,” Keith Temperton at Tavira Securities said. “The data is bad, but the stimulus is outweighing it for now. But I don't imagine it's going to last.”

US President Donald Trump on Thursday signalled a further deterioration of his relationship with Beijing over the coronavirus, saying he has no interest in speaking to his Chinese counterpart right now and suggested he could even cut ties with the country.

However, global stocks took cues from a strong session on Wall Street overnight, pinning hopes on the reopening of economies and the possibility of additional stimulus.

An early reading of Germany's GDP showed Europe's largest economy contracted by 2.2 per cent in the first quarter, its steepest slump since the 2009 financial crisis, but was largely as expected.

Supporting market gains on Friday, German food-processing equipment maker GEA Group jumped 11 per cent after reporting better-than-expected first quarter results and confirmed its 2020 forecast.

Britain's biggest telecoms group BT Group Plc surged 8.7 per cent after a report that it was in talks to sell a multi-billion pound stake in its wholly owned network subsidiary, Openreach.

Swiss drugmaker Roche edged up 1.1 per cent after saying it would start selling a new digital diagnostics product that may simplify and accelerate screening of COVID-19 patients.

However, Swiss-based luxury group Richemont fell 2.3 per cent as it saw strong demand in China, but expects “headwinds in the months ahead” globally due to the new coronavirus.

British retailer WH Smith dropped 5.5 per cent as its total revenue plunged 85 per cent in April after sales at its airport and train station shops and kiosks were hit by government travel restrictions.

Published on May 15, 2020

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