European shares posted
a broad-based rally as China led gains in global equities amid
speculation that state support will limit its market turmoil.
All 19 industry groups
on the Stoxx Europe 600 Index rose, with carmakers and miners leading
the advance. Daimler AG, BMW AG and Volkswagen AG rose at least 2.5
percent. Commerzbank AG increased 6.8 percent after JPMorgan raised the
German lender to overweight, similar to buy, from neutral, and added it
to its list of top picks among European banks. Amlin Plc soared 33
percent after MS&AD Insurance Group Holdings Inc. agreed to buy the
Lloyd’s of London insurer. Rio Tinto Group contributed the most to gains
in a gauge of miners, rising 2.6 percent after giving a bullish
assessment of China’s steel and copper demand.
The Stoxx Europe 600
Index advanced 1.2 percent to 359 at the close of trading, after earlier
rising as much as 2.3 percent. Shares rebounded Monday from the
previous week’s decline, with miners leading gains, helped by
reassurances from China’s central bank governor that stability would
return to markets. Chinese stocks rallied Tuesday for the first time in
five days on speculation state-backed funds bought shares after a weak
trade report.
Investors are also
awaiting next week’s Federal Reserve meeting on interest rates. Traders
are pricing in a 28 percent chance that officials will raise borrowing
costs at the September gathering, down from almost even odds before
China’s currency devaluation Aug. 11.
A report showing the euro-area economy grew more than forecast in the second quarter also buoyed sentiment today.
Source: Bloomberg
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