European Shares Gain On China Optimism

European stocks traded higher on Monday after the latest inflation data from China stoked optimism about easing deflationary pressures in the world’s second-largest economy.

The upside remained limited as investors braced for a slew of key U.S. and Chinese data this week as well as the European Central Bank’s rate decision due Thursday for directional cues.

The European Central Bank is expected to hike all three policy rates by 25 basis points, citing a weaker growth outlook and no clear evidence of a peak in core inflation. Few economists, however, predict it will be a close call.

The pan European STOXX 600 rose 0.3 percent to 46.03 after gaining 0.2 percent on Friday.

The German DAX edged up 0.2 percent, while France’s CAC 40 and the U.K.’s FTSE 100 both were up around 0.3 percent.

Gains in metals prices helped lifted miners, with Anglo American, Antofagasta and Glencore climbing 2-3 percent.

British homebuilder Vistry soared 15 percent after reiterating its full-year guidance and announcing a £55 million ($68.8 million) share buyback.

AstraZeneca dropped 1.3 percent despite reporting encouraging initial results from the TROPION-Lung04 Phase Ib study evaluating datopotamab deruxtecan plus Imfinzi for the treatment of advanced non-small cell lung cancer.

Restaurant Group jumped more than 6 percent. The chain of restaurants and public houses said that it has inked deal with respect to the proposed sale of its loss-making Leisure business comprising of 75 trading sites and associated restaurants to the Big Table Group.

French lender Societe Generale gained 1.2 percent after it announced a strategic partnership with Brookfield Asset Management to originate and distribute high-quality private credit investments through a private investment grade debt fund.

Hannover added 1.3 percent. The German reinsurance firm said that it expects a further price increase in the global reinsurance market, citing ongoing geopolitical issues, increasing frequency and severity of natural catastrophe losses as well as high inflation.

Covestro AG jumped 3.6 percent. The maker of high-tech polymer materials has decided to enter into open-ended talks with Abu Dhabi National Oil Co. or Adnoc regarding a potential offer.

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