Economy

Global shares climb as China industrial data offers hope for coronavirus recovery

Date: Aug 10, 2020

European shares rose on Monday as industrial activity in China gained strength, another sign of recovery from the coronavirus pandemic that added to hopes the global economy would also return to health.

The broader Euro STOXX 600 rose 0.6%, with London's FTSE .FTSE buoyed 1% and European oil and gas shares .SXEP climbing 2% on rising oil prices.  

Shares in BP (BP.L) and Royal Dutch Shell rose 3.4% and 2.7% respectively after Saudi Aramco raised optimism about a growth in Asian demand and Iraq pledged to further cut supply.   

Deflation at China’s factories eased in July, data showed, driven by a rise in global energy prices and as industrial activity climbed back towards pre-coronavirus levels.   

Industrial output in the world’s second-biggest economy is steadily returning to levels seen before the pandemic paralysed huge swathes of the economy, driven by pent-up demand, government stimulus and surprisingly resilient exports.    

That bodes well for the global recovery from the coronavirus pandemic, market players said.   

“China is so much in advance in this process of lockdowns and exiting lockdown, that any good signs for the Chinese economy is essential (for the world economy),” said Florian Ielpo, head of macroeconomic research at Unigestion.    

The MSCI world equity index .MIWD00000PUS, which tracks shares in 49 countries, gained 0.1%. Wall Street futures gauges ESc1 pointed to a positive start.    

But advances were checked by tension between the United States (US) and China. Uncertainty about a deal on a US stimulus package also weighed on markets.    
--Reuters--

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