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European Shares Rebound On China Optimism Before Holiday

stockmarkets aug17 20jan23 lt

European stocks rose on Friday after China said the worst was over in the battle against COVID-19.

Investors also pinned hopes for demand recovery in the world's second-biggest economy on eve of upcoming Lunar New Year holiday.

The dollar edged lower in European trade after a slew of Fed officials said there is need for further rate increases at slower pace.

Traders await European Central Bank President Christine Lagarde's speech at Davos later in the day for fresh impetus. Kristalina Georgieva, Managing Director of the International Monetary Fund, will also speak.

The pan European STOXX 600 edged up 0.2 percent to 451.50 after losing 1.6 percent on Thursday.

The German DAX and the U.K.'s FTSE 100 gained around 0.4 percent each, while France's CAC 40 added half a percent.

Ericsson shares plummeted 6 percent in Sweden after the telecom major reported weak profit in its fourth quarter, hurt by hefty charges.

British corporate merchandize 4imprint rallied 3.7 percent after its FY profit beat analysts' expectations.

Lender Standard Chartered gained about 1 percent after it has been cleared to set up a wholly owned securities brokerage unit in China.

In economic releases, German producer price inflation eased for the third straight month in December to reach its lowest level in just over a year amid a moderation in energy prices, data from Destatis showed.

The producer price index climbed 21.6 percent year-over-year in December, which was slower than the 28.2 percent surge in October. Economists had forecast the price growth to ease to 20.8 percent.

Further, the latest inflation rate was the weakest since October 2021, when prices had risen 19.2 percent.

Separate data showed that U.K. retail sales unexpectedly declined in December despite the festive season.

The retail sales volume logged a monthly fall of 1.0 percent after easing by a revised 0.5 percent a month ago, data published by the Office for National Statistics revealed Friday.

This was in contrast to economists' forecast for a 0.5 percent increase and marked the second consecutive contraction.

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