China data drives early gains in European stocks

(Reuters) – European shares inched higher on Monday as a decline in China’s producer prices slowed and oil prices rose, while investors looked to Washington for signs of more U.S. stimulus.

The pan-European STOXX 600 index rose 0.3% by 0712 GMT, kicking off a week that could see subdued trading activity as traders head out for summer holidays.

Sectors considered more sensitive to economic health such as banks .SX7P, oil and gas .SXEP and automakers .SXAP rose as data showed China’s factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels.

Shares in energy majors BP (BP.L), Royal Dutch Shell (RDSa.L) and Total (TOTF.PA) rose nearly 2% as crude prices gained after Saudi Aramco (2222.SE) raised optimism about Asian demand and Iraq pledged to deepen supply cuts. [O/R]

French engineering company Spie (SPIE.PA) jumped 5.7% after a double upgrade to “buy” from Jefferies, while Dutch tech investor Prosus (PRX.AS) slid for a third day running as U.S. prepares ban on two popular Chinese apps, WeChat and TikTok.

Heavyweight sectors like technology .SX8P and healthcare .SXDP fell 1% and 0.4%, respectively, limiting gains in the broader market.

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