European stocks rise as Chinese factories see coronavirus rebound
European stocks rose on Tuesday after stronger-than-expected industrial data from China raised hopes that the world’s second-largest economy could stage a swift recovery from the coronavirus crisis.
The pan-European STOXX 600 index climbed by around 1.9%. London’s FTSE 100 rose by around 1.8%.
Germany’s DAX was up by almost 2.5%, while France’s CAC 40 was 1.8% in the green.
A closely watched official survey of Chinese factories suggested that an easing of restrictions in the country has prompted a rebound, with the manufacturing sector’s purchasing managers’ index (PMI) reading coming in at 52.0 in March.
That was well above analyst forecasts of 45.0, and a significant jump from the record-low figure of 35.7 seen in February.
“China provided Western investors with a light at the end of the tunnel on Tuesday, showing it is possible to return to growth after the worst of the coronavirus crisis,” said Conor Campbell, a financial analyst at Spreadex.
Because similar indicators from the US and Europe are likely to plunge in the coming days, the Chinese data gives investors reason to be “cautiously hopeful,” Campbell said.
The strong opening in Europe followed modest gains for stocks in Asia.
The World Bank warned on Tuesday that the pandemic was likely to severely dent economic growth in East Asian developing economies as well as in China.
China’s SSE Composite Index rose by 0.1% on Tuesday, while the Hang Seng was up by 1.3% in Hong Kong at market close.
While Japan’s Nikkei rose by around 0.9%, the KOSPI Composite Index in South Korea closed almost 2.2% in the green.
Oil prices, which crashed to a 17-year-low on Monday amid a price war between Saudi Arabia and Russia, staged a recovery of sorts on Tuesday.
Crude oil was trading 5.5% higher at $21.20 per barrel. Brent rose by 0.22% to $22.81.
Futures were also pointing to a higher open for US stocks on Monday.
S&P 500 futures rose by around 0.33%, Dow Jones Industrial Average futures climbed by 0.3%, while Nasdaq futures were up by 0.5%.
Source: Yahoo Finance