Stock markets push higher on positive China data


London (AFP)

European stock markets pushed higher on Wednesday, on the back of bright Chinese economic data and a modest recovery in oil prices, dealers said.

Frankfurt, London and Paris indices rallied after a broadly positive session in Asia, buoyed by upbeat Chinese trade data that gave some respite from a volatile start to 2016.

A slight rebound in oil prices also provided another boost, having collapsed underneath $30 on Tuesday for the first time in twelve years on global crude oversupply.

In foreign exchange activity, the European single currency retreated to $1.0817.

"European equity markets are trading higher ... on the back of better than expected Chinese trade data," said analyst Markus Huber at traders City of London Markets.

"There is quite some relief that both imports and exports fell substantially less than expected which for some is providing an indication that the state of the Chinese economy is less concerning than feared."

After more than a week of sharp equity losses fuelled by worries over China's economy, news that the country's exports had picked up in December provided some incentive to buy.

The rise in Chinese overseas shipments, from a fall in November, indicated authorities' weakening of the yuan currency against the dollar was beginning to filter through.

The figures came against a backdrop of contracting global trade last year, meaning China's export performance was relatively strong.

However, Frederic Neumann, co-chief Asia economist at global banking giant HSBC, sounded a note of caution.

"A bit of relief here that the Chinese export engine has not entirely started to throttle back -- but if you look at leading indicators, they actually suggest that new exports orders are continue to contract (and) those orders placed with Chinese companies continue to weaken," Neumann told AFP.

"So going into 2016, it doesn't look as if Chinese exports will be a growth engine for China."

He added: "We don't think exports are going to improve much from here. We still know that in Europe things are fairly weak.

"We know that the US economy is not really accelerating but most importantly emerging markets continue to suffer and that's where China sends a lot of its products."

While the positive news sent Shanghai stocks higher initially, they ended Wednesday 2.4 percent in the red again having already slumped almost 15 percent this year.

However, Hong Kong ended up 1.1 percent and Sydney, where several firms with strong trade links with China are listed, closed 1.3 percent higher.

And Tokyo finally ended on a positive note after dropping for six straight sessions, gaining 2.9 percent.

Global markets including oil prices have been in free-fall since the beginning of the year on worries about the impact of a growth slowdown in China -- a key driver of world growth -- on other economies.

Crude fell briefly below $30 a barrel in New York Tuesday for the first time since December 2003 but prices picked up after a private report showed US supplies eased last week.

However, the commodity remains under pressure from a supply glut, weak demand and a global slowdown -- especially in China -- while key producers in the OPEC cartel continue to pump at near record levels.

On Wednesday US benchmark West Texas Intermediate and Brent crude both clambered back above $31 per barrel.

- Key figures around 1145 GMT -

London - FTSE 100: UP 1.0 percent at 5,989 points

Frankfurt - DAX 30: UP 0.9 percent at 10,077

Paris - CAC 40: UP 1.4 percent at 4,438.7

EURO STOXX 50: UP 1.4 percent at 3,107.4

New York - Dow: UP 0.7 percent at 16,516.22 (close)

Shanghai - Composite: DOWN 2.4 percent at 2,949.60 (close)

Tokyo - Nikkei 225: UP 2.9 percent at 17,715.63 (close)

Euro/dollar: DOWN at $1.0817 from $1.0858 Tuesday

Dollar/yen: UP at 118.30 yen from 117.66 yen