China growth data lifts Europe shares, oil and metals

Wed Jul 16, 2014 7:42am EDT
 
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By Nigel Stephenson

LONDON (Reuters) - Stocks rose in Europe and aluminum hit a 13-month high on Wednesday after China reported economic growth that was slightly stronger than markets had expected.

However, a fall in the Australian dollar, often seen as a proxy for Chinese growth, showed some investors remained cautions about recovery in the world's second largest economy.

China's economy expanded at a 7.5 percent annual pace in the second quarter, the statistics bureau said, just beating the 7.4 percent median forecast in a Reuters poll.

The numbers, which also helped push crude oil and some other industrial metals higher, confirmed the economy had stabilized after a shaky start to the year though analysts said the pick-up was largely driven by government stimulus.

The pan-European FTSEurofirst 300 equity index was up 1.1 percent, buoyed in part by mining stocks which strengthened in anticipation of demand from China.

"It confirms the trend we've seen from improving PMI data, and is in line with the idea of a pick-up in the global economy. That's positive for the mining sector," said James Butterfill, global equity strategist at Coutts.

Wall Street looked set to open higher, with stocks index futures indicating modest gains. The S&P 500 index slipped on Tuesday after Fed Chair Janet Yellen said in congressional testimony that valuations in some sectors "appear to be stretched".

The data from China, a major importer of metals, also helped push London aluminum close to its highest in 13 months.   Continued...

 
A man walks past the London Stock Exchange in the City of London October 11, 2013. REUTERS/Stefan Wermuth