Shares rose in Europe and Asia on Tuesday while the dollar lost ground against the euro after trade data from China and Germany highlighted the divergent outlooks of the two heavyweight economies.
China said its imports fell far more than expected last month, adding to concerns about the world’s second-biggest economy’s contribution to global growth.
The data, which showed exports on the other hand fell less than expected, weighed on oil prices. However, Chinese stocks, which have fallen some 40 per cent since mid-June, rose as some analysts calculated it could lead to further policy easing in the coming months.
By contrast, euro zone powerhouse Germany saw imports and exports hit record highs in July, pushing the trade surplus to a forecast-beating €22.8 billion.
“The contrast with what is happening in the German and Chinese trade balance is interesting and, at the moment, a positive for the European economy,’’ said KBC strategist Piet Lammens.
“But the steep decline in Chinese imports is further evidence of this slowing growth, which could weaken German data further out.’’
Worries over the Chinese growth outlook have led some analysts to question whether a widely expected rise in US interest rates might be delayed, though some policymakers have suggested they would look beyond the recent market turmoil.
The pan-European FTSEurofirst 300 rose 1.5 per cent while Germany's DAX index gained 1.7 per cent. Britain’s FTSE 100 index rose 1.5 per cent.
Wall Street, which was closed on Monday for a holiday, was expected to open higher, according to index futures.
Earlier, Asian shares broke a six-day losing streak. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1.33 per cent but remained within six points of a three-year low hit two weeks ago.
Japanese stocks fell, partly reflecting the data from China, one of its main trading partners. The Nikkei 225 index closed down 2.4 per cent, taking it into negative territory for the year.
China’s Shanghai Composite index closed 2.9 per cent higher, albeit on the lowest volume since late February. The CSI 300 index rose 2.6 per cent.
The dollar strengthened against the safe-haven Japanese yen, last trading up 0.7 per cent at 120.09 yen, but the euro gained 0.1 per cent to $1.1182, rising for a third consecutive day.
The dollar index, which measures the greenback against a basket of currencies, fell 0.2 per cent.
Yields on German government bonds, the euro zone benchmark, rose. Ten-year Bunds were yielding 0.69 per cent, up 2 basis points.
Oil, metals
Oil prices edged higher after falling 3 per cent on Monday, on concerns about the economic outlook and as cooperation between crude producers to curb oversupply looked unlikely.
Brent crude rose 53 cents a barrel to $48.16 but remained well below levels above $54 hit at the end of August.
Copper prices edged higher to $5,193 a tonne as the Chinese data showed imports of the metal held steady.
Gold held steady at around $1,121 an ounce after a four-day losing streak as the dollar eased.