European Shares Rebound From Four-Day Rout as Carmakers Rallyby and
Auto stocks climb as China forecasts faster 2016 sales growth
Energy companies reverse earlier gains as oil resumes decline
A rally in carmakers pushed European stocks to their best performance of the year as investors assessed valuations following a four-day losing streak.
Auto-related companies rose the most on the Stoxx Europe 600 Index after an industry association forecast an acceleration in Chinese sales in 2016. Energy stocks reversed gains, falling after oil retreated toward a 12-year low. Declines of more than 2.6 percent each in Rio Tinto Group and BHP Billiton dragged a gauge of miners to its lowest level since July 2003 as commodity prices slipped.
The Stoxx 600 rose 0.9 percent to 343.22 at the close of trading, paring an earlier advance of as much as 1.9 percent. After a 7 percent slide this year through yesterday, shares are trading at 14.4 times projected earnings, the lowest in about a year. Germany’s DAX Index, which relies heavily on exporters including carmakers, was among the best performing western-European markets today, adding 1.6 percent and paring its loss this year to 7.1 percent.
“This rebound could be a sign that global markets are calming down a little,” said Pedro Ricardo Santos, a broker at X-Trade Brokers DM SA in Lisbon. “We expect to see a recovery for equities this week, though we’re not yet talking about a strong rally from here. Concerns about commodities prices will persist, and pressure on those sectors continues to be very high.”
Investor fear that turmoil in China’s stocks and currency will spread to the global economy has spurred declines in world markets this year, wiping about $5.4 trillion off the value of international equities. Mining companies have suffered the most in Europe, with a gauge of regional commodity producers sliding 15 percent so far in 2016.
Among stocks moving on corporate news, Debenhams Plc jumped 16 percent after the British retailer reported 19-week holiday sales that beat analysts’ projections. Wm Morrison Supermarkets Plc rose 8.7 percent as the grocery chain unexpectedly snapped a four-year record of of declining revenue.
SAP SE advanced 3.7 percent after reporting fourth-quarter sales and earnings that topped analysts’ estimates as businesses signed deals for its latest flagship software.
Michael Page International Plc dropped 8.1 percent, the most since August 2011, after saying profit growth slowed at its U.K. unit.