European stocks ended higher on Tuesday, hoping demand in China could continue as authorities sought to relax COVID-19 restrictions as investors also welcomed optimistic earnings forecasts.
The STOXX 600 index rose 1.2%, with mining leading the way with a 3.2% jump. Banks and industrial stocks were also among the biggest contributors.
The risk appetite was heightened after Shanghai achieved the long-awaited milestone when there were no new COVID-19 cases outside the quarantine zone, which could begin to lift restrictions.
“Markets are obsessed with what’s happening in China, and that’s basically the single main catalyst,” said Keith Temperton, a sales man at Fort Securities.
Concerns about growth in China, the high interest rate environment are suppressing economic momentum and the outcome of the Russia-Ukraine war has hurt the market this year, with the STOXX 600 approaching a one-year low in March.
The market has also seen widespread unrest. The region-wide benchmark hit a two-month low last week, but has risen nearly 5% since that level. For the year, it decreased by about 10%.
Data from the United States showed a strong increase in retail sales in April, adding a day off from global growth concerns.
Paul Ashworth, North America’s chief economist at Capital Economics, said: “Never bet against US consumers is always a good proverb.
“Despite rising prices weighing on their purchasing power, the US consumer now seems to be the only one to keep the global economy afloat.”
In separate shares, French power group ENGIE strengthened 5.3% after posting first-quarter higher profits and raising its 2022 outlook, saying it was in talks with Russia’s Gazprom to change its gas supply scheme.
Daimler Truck Holdings and Caixabank of Spain rose 6.5% and 5.2%, respectively, in the forecast.
Power generation company ContourGlobal rose 32.9% after US private-equity firm KKR agreed to buy the firm for 75 1.75 billion ($ 2.16 billion).
The Norwegian oil producer told Reuters that Equiner SA fell 0.2% after taking the first step with ExxonMobil Corporation to expand উন্নয়ন 8 billion in oil development off the coast of Brazil. (Reporting by Susan Matthews and Shreyashi Sanyal in Bangalore; Editing by Utteresh V and Allison Williams)