Europe close: Basic Resources shares lead advance on hopes for Chinese stimulus
By Alexander Bueso
Date: Tuesday 11 Jun 2019
(Sharecast News) - Stock markets across the Continent saw big gains on the back of hopes for further economic stimulus in China, which offset the ongoing strain on markets from US-China trade war.
On a more positive note, US Commerce Secretary Wilbur Ross appeared convinced that Washington and Beijing would be able to reach a deal, telling broadcaster CNBC: "Eventually, this will end in negotiation [...] Even shooting wars end in negotiations."
"At the G20, at most it will be [...] some sort of agreement on a path forward, but certainly it's not going to be a definite agreement," he reportedly added.
By the end of trading, the benchmark Stoxx 600 was standing 0.69% higher at 380.89, alongside a jump of 0.92% for the German Dax to 12,155.81, while the FTSE Mibtel had added 0.61% to 20,609.70.
Shares in Auto & Parts companies did especially well, with the Stoxx 600 sector gauge adding 1.62% to 478.72, while that for firms in the Basic Resources space was up by 2.76%.
To an extent, German stocks were playing catch-up, having missed out on the previous session´s gains because the Frankfurt stock exchange had remained close in observance of Whit Monday.
In another boost to sentiment, European Central Bank governing council member, Olli Rehn, said that all options were on the table should further monetary stimulus be needed, including further changes to the ECB's so-called 'forward guidance' and tiered interest rates.
Just as well perhaps, giving the rapidly deteriorating investor sentiment.
According to the Sentix institute, investors were already gearing up for a recession in Germany and activity in the euro area was seen as only slightly positive, with the single currency bloc immersed in a slowdown.
Sentix's investor sentiment index for Germany retreated from a reading of 7.9 in May to -0.7 for June, marking its lowest level since March 2010.
Novo Nordisk shares were on the front foot, gaining on the back of poor test results for one of competitor Eli Lilly's diabetes drugs.
Hugo Boss was also wanted after analysts at Morgan Stanley bumped up their recommendation for the shares from 'underweight' to 'equalweight'.
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