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European Shares Set To Extend Gains As Trade Fears Ease

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European stocks are likely to open on a positive note Wednesday as weak data from China reinforced expectations Beijing could unveil more economic stimulus.

China's industrial production and retail sales growth eased more-than-expected in April, suggesting weak economic activity at the start of second quarter.

Industrial production advanced 5.4 percent year-on-year in April, following March's 8.5 percent increase. The growth rate was forecast to slow moderately to 6.5 percent.

Likewise, annual growth in retail sales eased to 7.2 percent from 8.7 percent a month ago. Sales were expected to expand 8.6 percent.

On the positive side, fixed asset investment climbed 6.1 percent during January to April period compared to the 6.3 percent expansion logged in January to March period. Economists had forecast 6.4 percent growth.

Property investment increased 11.9 percent in four months to April following the 11.8 percent rise in January to March period.

Closer home, quarterly national accounts data from Germany and final inflation figures from France are due later in the day, headlining a busy day for the European economic news.

In the U.S., traders will likely keep a close eye on reports on retail sales, industrial production and homebuilder confidence.

Asian stocks followed Wall Street higher after U.S. President Donald Trump said a settlement is possible with Beijing.

Trump said he had a "very good" dialogue with China and insisted talks between the world's two largest economies had not collapsed.

The dollar index held steady while oil prices eased after a surprise rise in U.S. stockpiles.

Italian bonds slumped after the country's deputy prime minister said the government would break European Union budget rules on debt levels if needed to spur employment.

Overnight, U.S. stocks rose amid bargain hunting after President Trump indicated that he would be meeting with Chinese President Xi Jinping at the G20 Summit in Japan late next month.

The Dow Jones Industrial Average rose 0.8 percent to rebound from its lowest closing level in three months, while the tech-heavy Nasdaq Composite surged 1.1 percent and the S&P 500 added 0.8 percent.

European markets also regained some ground on optimism the U.S. and China will eventually reach a trade deal despite the retaliatory tariffs announced by China.

The pan European Stoxx 600 gained 1 percent. The German DAX advanced 1 percent, France's CAC 40 index rallied 1.5 percent and the U.K.'s FTSE 100 added 1.1 percent.

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