Chinese data boosts the markets and financial climbs higher
Fiona Cincotta February 8, 2013 7:42 PM
<p>European markets rose in trading on Friday, recovering some of their losses from the previous session as strong data from China overnight boosted hopes that […]</p>
European markets rose in trading on Friday, recovering some of their losses from the previous session as strong data from China overnight boosted hopes that growth was returning to the global economy.
By mid-afternoon the FTSE was up 0.35%, the CAC was up 0.85% and the DAX was up 0.44%.
Chinese exports grew 25% against an expected growth of 17%, while imports grew 28.8% – showing strong domestic demand. Chinese data has really been under the spotlight so far this year as hope increased that the world’s second-largest economy has avoided a crash landing. Although still early days, there does appear to be a significant turnaround for China with this recent data adding to previous strong manufacturing figures. Mining stocks here in the UK were boosted as were financials, which are particularly sensitive to the health of the global economy.
Financials also found support after the ECB detailed the repayment needs from the institutions that borrowed money after the sovereign debt crisis. Twenty-one banks will pay back another €5 billion of the LTRO (Long term refinancing operation) to the central bank signalling an unwinding of the crisis measures and a sign of confidence returning albeit a cautious one.
Elsewhere in Europe, Union Leaders have agreed a new budget framework agreeing to fix total EU spending at €960 billion over the next seven years. Despite the political uncertainty of Italy and the scandal of Spain, traders are entering the markets again with lifted sentiment and the sensation that progress is being made in the eurozone.
Looking at individual stocks here in UK, broker upgrades featured heavily in pushing stocks outside of the mining and financial sector higher. Vodafone gained over 1.6% following an upgrade to buy from neutral from Bank of America Merrill Lynch. Antofagasta climbed 1% after HSBC raised the miner from underweight to neutral and Anglo American also received an upgrade from HSBC to overweight from neutral, sending its shares 1.9% higher.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.