European equities see rise on German GDP

EUROPEAN stock markets mostly rose yesterday, shrugging off a largely downbeat session in Asia, with sentiment partly lifted by German economic growth data.

Strong foreign trade and buoyant consumption drove Germany’s economy, Europe’s largest, to better-than-expected growth in the second quarter, federal statistics office Destatis said.

Gross domestic product (GDP) grew by 0.4 per cent between April and June, adjusted for seasonal, calendar and price effects – twice as fast as analysts surveyed by Factset predicted.

However, the final figure represented a slowdown from the unexpectedly strong 0.7 per cent expansion in the first quarter.

News of expanding growth sent Frankfurt stocks climbing 0.2 per cent while Paris added 0.4 per cent, albeit with both markets edging back off marginally higher morning gains.

London drifted lower, losing 0.4 per cent as weak commodity prices hit the mining and resources sector and following poor results from Glencore.

Europe’s indices had rebounded on Tuesday after a survey showing eurozone economic activity edged higher in August with few signs that Brexit-linked dangers are emerging.

“German GDP figures . . . showed steady growth in the economy,” said economist Ana Thaker at trading firm PhillipCapital UK.

“This will come as a positive sign following the strong PMI figures of yesterday and growth in the eurozone’s largest economy could permeate through the euro area.”

London’s top faller was Swiss-based miner Glencore, whose share price tumbled 4.6 per cent to 180.05 pence.

On Wall Street, petroleumlinked shares came under pressure ahead of a US oil inventory report with traders awaiting Friday’s speech by Federal Reserve Chair Janet Yellen and any sign of an interest rate hike this year.

About 30 minutes into trade, the Dow Jones Industrial Average stood at 18,522.78, down 0.1 per cent while the broadbased S&P 500 slipped 0.1 per cent and the tech-rich Nasdaq Composite Index added less than 0.1 per cent.

Amid speculation of a rate rise, Yellen’s comments on Saturday at a global central bankers meeting in Jackson Hole will be scoured for forward guidance on US central bank policy.

Most bets are on a move just before the end of the year, or in February.

Asian traders likewise waited on Yellen’s speech and most regional markets slipped back.