European shares rallied at the open on Monday after falls last week when a strong US jobs sparked fears of more aggressive interest rate rises by the Federal Reserve.
The pan-European Stoxx 600 was up 0.68% in early deals with all major bourses higher. Investors will now turn their attention to US inflation data later in the week.
Sentiment was also boosted after China reported a record trade surplus for July thanks to strong export growth.
Exports grew 18% year-on-year in the month, coming in comfortably ahead of analysts’ expectations for a 14% jump. Imports rose 2.3% year-on-year in July, however, missing expectations of 4% growth.
Despite the positive tone, analysts struck a cautious note about the Chinese data.
“Exports held up well last month, thanks to a backlog of orders still being cleared. But it won’t be long before shipments drop back on cooling foreign demand,” said Julian Evans-Pritchard, senior China economist at Capital Economics. “Meanwhile, imports continued to trend down, pointing to further domestic weakness.”
In equity news, French utility company Veolia rose 3.3% as it confirmed it would sell Suez’s UK waste business to Australia’s Macquarie Group Ltd for around €2.4bn.
UK financial services company Hargreaves Lansdown gained 3.7% after Deutsche Bank raised its price target for the stock.
Reporting by Frank Prenesti at Sharecast.com
