European shares steadied on Tuesday, recovering after sharp losses earlier in the session, as crude oil prices bounced back above $30.
ADVERTISEMENTInvestors remain jittery and Europe’s major stock markets are lacklustre following a panic sell-off of shares in China and as oil dipped again.
In early trading on Tuesday, European share prices retreated in reaction to the main index in Shanghai having slumped almost 6.4 percent to a 14-month low.
That followed word that China’s annual rail freight volume fell 11.9 percent in 2015 from a year earlier, compared to a 3.9 percent drop in 2014. Rail freight is viewed as a good gauge of the state of the country’s economy.
Oil prices continue to fluctuate – Brent crude slid one percent at the start of the trading day in Europe but had recovered all of that by the afternoon, taking it back above $30 a barrel.
That helped energy companies to rebound after they took a hammering in the morning.
Oil prices were helped by expectations that OPEC and non-OPEC producers may be edging closer to a deal.
The Organization of the Petroleum Exporting Countries is making renewed calls for rival producers to cut supply alongside its members.
Reflecting investors concerns gold prices pushed up.
Chinese burn
China has a crucial influence on commodities prices as the world’s second-biggest economy and a major consumer of oil and metals.
China’s fickle stock markets have now slumped about 22 percent so far this year on concerns about the slowing economy and confusion over the central bank’s foreign exchange policy.
Other stock markets in Asia and Europe were also down on Tuesday, with Japan’s Nikkei dropping 2.4 percent and MSCI’s broadest index of Asia-Pacific shares outside Japan down 1.5 percent, extending earlier losses after the late slide in China.
Corporate news
Shares in Siemens were up 7.8 percent by mid-afternoon after Europe’s biggest industrial group raised its full-year earnings forecast on strong first-quarter results.
“We were most surprised by the strength in Healthcare with 8 percent order and 11 percent organic sales growth, while the slowdown in the short-cycle Digital Factory impacted margins as expected,” wrote Barclays, which rates Siemens “underweight”.
Philips stood out with a gain of 6.5 percent after the Dutch maker of LED lights and medical scanners on Tuesday reported core fourth-quarter earnings that beat expectations but issued a cautious outlook for 2016.