Stocks across Europe rose Monday, finding a measure of calm after nervousness about China’s economy and a U.S. rate hike left equities in the red last week.
The Stoxx Europe 600 SXXP, +0.31% picked up 0.3% to 354.08, supported by gains in all sectors, led by the basic materials, oil and gas and utilities groups. Near the top of the index Glencore PLC GLEN, +3.65% GLCNF, -5.03% jumping 6.2% after the miner and commodities trader said it’s undertaking measures aimed at reducing net debt by about $20 billion. The company is ditching its final dividend and plans a $2.5 billion stock sale.
But trailing the pan-European index was Associated British Foods PLC ABF, -2.24% Shares fell 2.8% after the company, which owns fashion retailer Primark, said full-year earnings will come in below what it made last year in part on weaker earnings from its sugar division.
Overall volume will likely be lower than usual as U.S. equity markets will be closed for the Labor Day holiday.
Indexes: The U.K.’s FTSE 100 UKX, +0.47% rose 0.6% to 6,078.94, aided by Glencore’s surge. Germany’s DAX 30 DAX, +0.32% rose 0.3% to 10,067.24, and France’s CAC 40 PX1, +0.20% gained 0.1% to 4,529.00.
China impact: The pan-European index last week fell 2.8%, with global equity markets being hit in recent weeks on fears about slowing growth in China, the world’s second-largest economy. Markets were also weighed by speculation the Federal Reserve may raise interest rates in the U.S. at its meeting next week, at a time of intense market volatility and questions about global growth.
People’s Bank of China Governor Zhou Xiaochuan over the weekend told central bankers and finance ministers from the Group of 20 largest economies that the “correction in the stock market is almost done,” and that the Chinese yuan is steadying after a devaluation last month.
China’s foreign-exchange reserves fell to $3.56 trillion at the end of August, as the nation’s central bank intervened in the currency market.
The data “suggest that the People’s Bank is not burning through its reserves as quickly as many had believed,” said Julian Evans-Pritchard, China economist at Capital Economics, in a note.
In Shanghai, the main benchmark Shanghai Composite Index SHCOMP, -2.52% ended a choppy session Monday down by 2.5%.
“And, if the situation deteriorates, the Fed could delay its hiking, to which the European Central Bank could react by extending its [quantitative easing] program,” they said.
