- Stoxx 600 up 1.2 pct
- China eases foreign investment restrictions
- Euro rises on EU immigration deal, sentiment improves
- Galapagos plunges on drug trial results
European shares strongly rose at the open, following the lead of Asian markets which rallied from nine-month lows as China eased foreign investment limits and provided investors a temporary respite to trade war fears.
The pan-European STOXX 600 was up 1.2 percent by 0810 GMT, while Germany’s trade-sensitive DAX jumped 1.4 percent.
European indexes will however probably close on a loss for the week and the month as the escalation of the United States’ trade dispute with China and the European Union took its toll.
A deal struck by EU leaders on immigration in the early morning also help improved sentiment and triggered a spike in the euro.
“The migrant crisis in Europe threatened German Chancellor Angela Merkel’s fragile coalition, which was in danger of collapsing if she left the summit without a deal,” commented Jasper Lawler, head of research at London Capital Group.
Belgium’s Galapagos posted the worst performance, plunging over 12 percent after disappointing drug trial results.
Spain’s Caixabank led European stocks, up 6.5 percent after announcing the sale of its real estate business.
Deutsche Bank rose about 3.4 percent despite failing a U.S. stress test.
“This was expected, in our view, and we see no material change to our view,” Goldman Sachs said in a note.
As a whole, the European banking sector was firmly up, rising 1.7 percent but remains one of the worst performers of 2018 with a 11.5 percent decline since the beginning of the year.
The tech sector, which was hard hit during the week as worries about global trade grew, also enjoyed a strong rebound with a 1.9 percent rise.
German lighting group Osram which plunged over 20 percent during the previous session after slashing its profit guidance, recouped some of its losses, rising 5.8 percent. French supermarket group Casino rose 4.5 percent after brokers’ upgrades.