Watch: European markets rise on optimism selloff is over
Stocks rallied on Monday after strong industrial profit figures from China raised hopes that the slump in global economy this year may not be as bad as feared.
China’s industrial profits grew for the fourth straight month in August, according to official figures released on Sunday. Profits in the sector so far this year are now only 4.4% down on 2019.
The data helped create a buoyant mood among equity traders on Monday morning. Connor Campbell, a financial analyst at SpreadEx, said European investors were “looking for an excuse to rebound after limping to a close last week.”
The DAX (^GDAXI) gained 2.9% in Frankfurt, led higher by German industrial stocks. Engineering group Thyssenkrupp (TKA.DE) rose 3.7%, Heidelberg Cement (HEI.DE) rose 3.7%, and chemicals giant BASF (BAS.DE) added 2.9%.
Wall Street popped at the open, extending gains from last week. The S&P 500 (^GSPC) was up 1.1% shortly after the start of trading, while the Dow Jones Industrial Average (^DJI) was 1.2% higher and the Nasdaq (^IXIC) had climbed by 1.1%.
Asian markets were mixed overnight. Japan’s Nikkei (^N225) surged 1.3% and the Hong Kong Hang Seng (^HSI) rose 0.9%. However, mainland Chinese stock markets missed out on the rally — the Shanghai Composite (000001.SS) was flat and the Shenzen Component (399001.SZ) fell 0.4%.
Shares in HSBC (HSBA.L) jumped over 10% at the open in London after China’s Ping An, the world’s biggest insurer, increased its investment in the bank. Filings showed Ping An spent around $40m (£31m) buying shares in HSBC at the end of last week. A Ping An spokesperson told the South China Morning Post the company had “a long-term investment” in HSBC.
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Diageo (DGE.L), the drinks maker behind Johnnie Walker whisky and Guinness beer, jumped more than 7% after a bullish update on recent trading. Chief executive Ivan Menezes said sales in the US had been “ahead of our expectations” and said Diageo was seeing “improvement in our performance across all regions.”