European Stocks Rebound as China Data Ease Global Growth Worries

  • Chinese producer prices advance for first time since 2012
  • Man Group soars after posting higher funds under management

European stocks rebounded after three days of declines as better-than-expected Chinese data helped ease investor concerns over global growth and the health of the world’s second-biggest economy. 

Italian banks led lenders to the biggest advance on the Stoxx Europe 600 Index, with Banco Popolare SC and Banca Popolare di Milano Scarl rising 6.1 percent or more on optimism that shareholders will this weekend back their merger. Rio Tinto Group and BHP Billiton Ltd. contributed the most to gains among miners. Anglo American Plc added 1.6 percent after people with knowledge of the matter said Apollo Global Management LLC and Xcoal Energy & Resources LLC are poised to buy its Australian metallurgical coal assets.

The Stoxx 600 climbed 1.3 percent at the close of trading, its biggest gain since Sept. 22. The equity gauge rose 0.1 percent this week, halting a two-week losing streak. Today’s increase pushed it above its 100-day moving average after it dipped below in the past two days. Gains were helped as forecast-beating results from Citigroup Inc. and JPMorgan Chase & Co. alleviated some concerns about the strength of U.S. earnings. 

“The fall yesterday was a little too vigorous, so we are getting a bounce back,” said Frances Hudson, an Edinburgh-based global thematic strategist at Standard Life Investments, which oversees 269 billion pounds ($328 billion). “Following the data on producer prices, we are getting a strong performance from miners today. At a market level, we seem to be traveling optimistically with regards to earnings in Europe.”

Shares slid yesterday as an unexpected decline in Chinese exports reignited fears over global growth prospects. Data today showing producer prices rose for the first time since 2012, as well as higher-than-estimated inflation, offered a more encouraging outlook for China.

European stocks have yet to fully recover from a slide at the start of the year precipitated by anxiety over a Chinese slowdown. The reemergence of this concern yesterday unsettled investors already fretting over the implications of a Federal Reserve interest rate hike this year, U.S. elections and an Italian referendum in November, as well as the fallout from Brexit.

Anxiety about the health of corporate Europe has also weighed on equities. More than a 150 members in the Stoxx 600 report earnings in October, with analysts forecasting a profit decline of 4.2 percent this year for the index’s constituents. Still, heavyweights including BASF SE and LVMH Moet Hennessy Louis Vuitton SE this week reported better-than-forecast earnings.

Among other stocks moving today, Man Group Plc jumped 14 percent -- the most since February 2014 -- after it posted a 6 percent increase in funds under management for the quarter, announced a share buyback and said it will acquire Aalto Invest Holding AG to branch out into private market investing.

Syngenta AG fell 2.1 percent on concern that its $43 billion takeover by China National Chemical Corp. could be disrupted by China’s plan to merge its acquirer with another state-owned entity.

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