China’s Exports Boost Sentiment, Deutsche Bank Says

China’s exports rebound last month will ease concern that a global slowdown hurt demand for the country’s goods, bolstering investor sentiment, according to Deutsche Bank AG.

Overseas shipments jumped 43.9 percent in June to $137.4 billion and the trade surplus more than doubled to $20 billion, the highest in eight months, the government said July 10.

“The impact of the European sovereign debt crisis on Chinese exports has been much smaller than feared and will likely remain modest” in the third quarter, Jun Ma, chief China economist at Deutsche Bank, wrote in a note to clients today. “This data point will provide a slight support for market sentiment in the very short term, as it helps ease some investors’ concern on the impact of global deceleration on China’s export performance.”

The benchmark Shanghai Composite Index last week had its biggest weekly gain of the year on speculation the government will wind back tightening measures that helped make the gauge Asia’s worst performer in 2010. The measure has slid as much as 28 percent this year on concern European austerity measures will damp imports of goods.

The index climbed 0.2 percent to 2,476.06 as of 9:51 a.m.

Sales to the EU and U.S., China’s two biggest markets, rose by about 40 percent in June, the customs bureau reported. Exports to Brazil more than doubled, those to Russia jumped 84 percent and shipments to India surged 59 percent as China targeted emerging markets to cushion reduced demand from developed economies.

Deustche Bank’s Ma said he remains “cautiously optimistic” about the outlook for China’s exports in the coming months. He predicts overseas sales growth will slow to about 32 percent from a year ago in the third quarter from 40 percent in the April-to-June period.

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