Most European stock markets rose yesterday as traders reacted positively to inflation data out of China and a rebound in oil prices, with Italian banking shares racing higher.
In Frankfurt, the DAX 30 climbed 0.6% and the Paris CAC 40 won 0.2%.
London’s FTSE dipped 0.07%.
“A drop in the US dollar and a jump in the price of oil helped stocks build on morning gains on Monday after China reported a slowdown in producer price inflation,” said analyst Jasper Lawler at CMC Markets.
Meanwhile investors in Italy were waiting for announcements from the treasury following reports the government would create two funds to help struggling banks.
Italian bank shares have been on a rollercoaster in recent weeks over the prospects for merging smaller banks and resolving their bad debts, and the latest reports sent them sharply higher.
Shares in Banca Populare rocketed 10.3% higher, while Banca Monte dei Paschi di Siena jumped 9.8%.
Even larger banks like Intesa Sanpaolo and Unicredit climbed higher, gaining 3.1% and 5.1%, as the reported plans would ease their burden in guaranteeing the operations in buying shares in smaller banks.
Milan’s FTSE-Mib index climbed 1.3%.
Meanwhile, Wall Street stocks moved higher ahead of a heavy week for earnings reports, with the Dow adding 0.3% in midday trading.
Earnings season for the first quarter was to open later yesterday with a report from Alcoa and JPMorgan set to report tomorrow, followed by Citigroup, Wells Fargo and Bank of America later in the week.
Japan’s Nikkei earlier led most Asian stock markets lower as the yen resumed its march against the dollar and investors nervous about the stuttering global economy tentatively await the start of corporate earnings season.
However, Shanghai surged after data showed Chinese inflation held above two% for a second-straight month in March, indicating some stability in the economic powerhouse.
The broad regional losses followed last week’s sell-off as traders become increasingly fearful central banks are running out of ideas to ramp up global growth, with the International Monetary Fund expected to lower its forecasts this week.
In Tokyo the benchmark Nikkei ended 0.4% lower as exporters took another hit from the yen’s strength. The unit, which is considered a safe bet in times of uncertainty, has climbed about 5% against the greenback this month alone.
But Shanghai closed up 1.6% — and helping Hong Kong to a 0.4% rise — as dealers welcomed the inflation figures.
The consumer price index came in at the same as February’s 2.3%, the latest indication that the world’s number-two economy may be stabilising, following a surprise jump in a gauge of factory activity at the start of the month.
The figures will also ease pressure on the government and central bank to add more economy-boosting stimulus after several rounds of easing measures including six interest rate cuts in the year to November.
“Given the upcoming stabilisation of real economic activity, ongoing rebound in property sales and prices, and the recent jump in headline CPI, we think policy easing momentum has likely peaked in the near term,” UBS Group AG economists wrote in a report ahead of the release.
The Banca Monte dei Paschi di Siena logo sits on a window at one of the company’s bank branches in Rome. Shares in the bank jumped 9.8% yesterday.