After fluctuating between gains and losses throughout the day, European stocks ended with advances. But not those in Germany.
The Stoxx Europe 600 Index rose 0.3 percent to 387.26 at the close of trading in London, recovering from a decline of as much as 0.6 percent triggered by a report that showed manufacturing in the New York region unexpectedly shrank. Volume of Stoxx 600 shares changing hands was a third lower than the 30-day average, a factor that might have contributed to the volatility.
“U.S. data were a little softer than people had hoped and that suggests there is increasing nervousness on whether the U.S. is strong enough to pull the global economy,” said John Haynes, head of research at Investec Wealth & Investment. “We’re going to get fluctuations, but the U.S. will come through the current less-wonderful patch pretty well.”
European shares started the day with gains, with the Stoxx 600 rising as much as 1.1 percent. Automakers led the rally, before sliding as the U.S. report raised concern that the global economy isn’t strong enough to withstand a Federal Reserve interest-rate increase. Germany’s DAX Index lost as much as 1.5 percent before ending the day down 0.4 percent.
“Investors are going to look at Wednesday minutes of the most recent Fed meeting to see how they’re going to react to the recent yuan devaluation and further decline in oil prices,” said Patrick Spencer, equities vice chairman at Robert W. Baird & Co. in London.
The Stoxx 600 slumped 2.7 percent last week, the most in more than a month, as China’s currency devaluation raised concern that exporters would get hit. Yet JPMorgan Chase & Co. sees the move differently: It says the Fed is less likely to raise interest rates soon as the yuan weakens.
“Many interpret last week’s CNY depreciation very negatively, as either the exporting of deflation, the start of a currency war or a recognition that Chinese growth is much worse than thought,” JPMorgan equity strategist Mislav Matejka wrote in a report on Monday. “We don’t see it that way.”
Greece’s ASE Index led the gains among western-European markets, climbing 1 percent. German Chancellor Angela Merkel said she’s confident the International Monetary Fund will join the nation’s third-bailout program and signaled willingness to consider debt relief to help make it happen.
“An agreement on Greek debt this week bodes well for stocks,” Spencer said.
Amid companies moving on corporate news, Alstom SA jumped 7.2 percent after a report that the European Union will probably approve General Electric Co.’s asset acquisition. Credit Agricole SA advanced 2.1 percent as HSBC Holdings Plc recommended buying the stock. Hennes & Mauritz AB added 2 percent as July sales beat estimates.
Miners fell with commodities extending their lowest level since 2002.