Europe open: Stocks track sharp gains in Asian trading
By Alexander Bueso
Date: Monday 06 Jul 2020
(Sharecast News) - European stocks began the week firmly on the front foot, boosted by an overnight surge in Chinese stocks.
Analysts meanwhile offered somewhat different takes on the outlook for stocks.
Mark Haefele, chief investment officer at UBS Global Wealth Management advised clients not exit markets due to the current uncertainty.
But JP Morgan strategist, Mislav Matejka, was less upbeat, pointing out recent strong buying by retail investors and how year-to-date growth in central bank balance sheets was only on a par with what was seen after 2008-09, and less so in the case of the Federal Reserve.
As of 1030 BST the benchmark Stoxx 600 was climbing 1.5% to 370.9, alongside a 1.86% advance for the German Dax to 12,758.84, while the FTSE Mibtel was putting on 2.05% to 20,129.83.
In the background, overnight the Shanghai Stock Exchange's composite index shot up by 5.71%, a move that some attributed to an article in the Chinese Securities Journal arguing in favour of a 'bull' market in stocks to support the economy's digitalisation.
Euro/dollar meanwhile was up by 0.35% to 1.1287 while front-dated Brent was adding 1.6% to $43.48 a barrel on the ICE.
Commerzbank was at the top of Stoxx 600 leaderboard after the German lender's chief executive ad chairman tender their resignations.
Right behind was stock in Barratt Developments, with investors cheering a far-stronger-than-expected on IHS Markit's construction sector Purchasing Managers' Index for June which printed at 55.3.
The other main economic releases were somewhat a tad mixed.
On the positive side of the ledger, euro area retail sales volumes bounded ahead by 17.8% month-on-month in May (consensus: 8.0%), but German factory orders bounced by only 10.4% (consensus: 15.4%).
Nonetheless, driving the latter was a 20.3% bounce in orders for capital goods, a good lead indicator for future investment demand, and many countries on the Continent were still in lockdown at the start of May so, according to some analysts, the figures might yet improve somewhat more.
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