On Monday, the European stocks advanced following the release of robust Chinese economic data.
According to the data, China seems to be bouncing back after ending with a 2.7% gain in November. The Stoxx Europe 600 SXXP, +0.33% gained 0.5% to 409.47.
Banks, including BNP Paribus (BNP, +1.12%) and oil producers, including BP (BP,+1.58%), lead the advance.
At first sight, the uptick in PMIs from China and Japan to Turkey and the eurozone seemed too good to ignore.
However, some analysts say the recovery won’t be so quick and sharp, considering the ongoing trade war and China’s increasing corporate and household debt challenge. They limit China’s scope to reflate the domestic economy.
“The world’s economic downturn will likely stay for a long time,” Communist party magazine quoted Yi Gang, China’s central bank governor.
“We should stay focused and targeted, while not competitively lowering interest rates to zero or engaging in quantitative easing,” Bloomberg also quoted him.
Germany’s Fiscal Boost Hopes
German’s Dax was among the biggest winners, gaining 0.7%.
The German DAX DAX,+0.54% rose 0.64% to 133321.72, the French CAA 40 PX1. +0.33% added 0.5% to 5934.68 and the U.K FTSE 100 UKX +0.37% rose 0.57% to 7388.37.
In addition to China’s PMI, which lifted trade sent=sitive stocks, the DAX also gained from the domestic political developments at the weekend.]
Social democrats’ election of a new and more clearly left-wing leadership raised the likelihood of Berlin loosening its purse strings.
Yields on the German 10-year old Bind rose ti three-week high in response.
If the German Federal coalition fell apart, it more than likely that any new administration would evolve the green Party.
The awareness helped push down energy company RWE by over 2%.
Elsewhere across Europe, conventional energy stocks were likewise under pressure at the start of a week that includes a high-level international conference in Spain on reducing greenhouse gas emissions. Spain’s Endesa lost 1.2%, while Drax Group (LON: DRX) lost 3.1% and Centrica (LON: CNA) 1.9%. Grid operators Red Electrica and National Grid (LON: NG) both fell around 1%