UKX FTSE 100 Index

By Barbara Kollmeyer, MarketWatch

German industrial production declines

German stocks were taking the lead in an upbeat European session Tuesday, as equities in the region took inspiration from gains across the globe and investors decided to momentarily set aside global trade anxieties.

What are markets doing?

The Stoxx Europe 600 index traded 0.6% higher to 390.87, after finishing down (http://www.marketwatch.com/story/european-stocks-waver-as-trade-tensions-flare-up-again-2018-08-06) 0.1% on Monday. The index was looking at its best close since late July.

The German DAX 30 index was among the strongest regional gainers, up 0.8% to 12,693.09, while the FTSE MIB Italy index rallied by 1.2% to 21,846.52. France's CAC 40 index rose 0.8% at 5,522.62 and the FTSE 100 index climbed 1% to 7,743.38.

The euro was last up 0.4% to $1.1595, higher than $1.1555 seen late Monday.

The pound gave up some gains and flattened to $1.2947, versus $1.2942 late Monday.

What's driving the market?

Europe was picking up the baton from Asia, where stocks rose, and notably in China, as the Shanghai Composite bounced back, gaining 2.7%, after hitting fresh multiyear lows Monday. After an upbeat session on Monday, U.S. stocks extended gains at the open Tuesday.

Europe markets were shaking off data that showed a decline in German industrial production (http://www.marketwatch.com/story/german-industrial-output-drops-in-june-2018-08-07-2485401), which comes on the heels of Monday's economic update that revealed a plunge in manufacturing orders (http://www.marketwatch.com/story/german-manufacturing-orders-plunged-in-june-2018-08-06-24854214)from the largest economy in the European Union. The country's economic ministry placing some of the blame for that result on trade tensions.

As trade tensions appeared to dissipate for the moment, investors remained focused on upbeat earnings, while climbing oil and material prices also parlayed into gains for Europe.

What are strategists saying?

"Confidence has returned as the S&P 500 moseys its way toward the January record high, and it remains encouraging to see stock markets hold their ground despite a drumbeat of trade war headlines of late," said Chris Beauchamp, chief market analyst at IG, in a note to clients.

"Earnings season is shaping up very well indeed, which accounts for why U.S. equities remain comfortably ahead of the likes of Europe, but a rising tide lifts all boats and will reinforce the impression that this economic recovery and its associated bull market has further to run," he added.

Stock movers

Among the most heavily-weighed stocks, French oil major Total SA (TOT) (TOT) saw its shares climb 1.6%, as BP PLC shares (BP.LN) (BP.LN) gained nearly 2%. Among other materials stocks, BHP Billiton PLC's shares (BHP.AU) (BLT.LN) jumped 3.4%.

Banks were also climbing across the board, with shares of HSBC Holdings PLC (HSBA.LN)(HSBA.LN) up 1.3% and Banco Santander SA's stock (SAN) (SAN.MC) up 1.2%.

And auto makers also helped out, with Germany's Daimler AG's stock (DAI.XE) up 1.8% and shares of Sweden's Volvo AB (VOLV-B.SK) advancing by 1.4%.

(END) Dow Jones Newswires

August 07, 2018 09:54 ET (13:54 GMT)

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