UPDATE 2-Europe closes higher as upbeat China data boosts German shares

  • Reuters
  • Stock Market News
UPDATE 2-Europe closes higher as upbeat China data boosts German shares
Credit: © Reuters.

* Trade-sensitive German shares gain on upbeat China data

* Hopes of dovish ECB support risk appetite

* Galapagos surges to record after Gilead raise stake (Updates to close)

By Sruthi Shankar

July 15 (Reuters) - European stocks ended higher on Monday as trade-sensitive German equities took heart from surprisingly strong Chinese data after worries about domestic growth led to a shaky start.

Frankfurt-listed shares .GDAXI had briefly dipped into the red in early trade after Germany's economy ministry pointed to weakness in the manufacturing and services sectors, suggesting a subdued second quarter for Europe's largest economy. DAX index ended 0.52% higher, however, with investors counting on the European Central Bank to signal further easing of monetary policy at a meeting next week given slowing growth.

"The markets rebounded as investors realised this affirms a growing conviction the ECB is getting ready to tee-up looser monetary policy," Stephen Innes, managing partner at Vanguard Markets Pte, wrote in a note.

The pan-European STOXX 600 .STOXX rose about 0.4% in a choppy trading session, with sectors exposed to trade headlines including automakers .SXAP , chemicals .SX4P and basic resources .SXPP companies topping gains.

Buoying risk sentiment was data from China that showed factory output and retail sales topped forecasts in June. Although economic growth slowed to 6.2% in the second quarter, its weakest pace in at least 27 years, it was in line with analysts' expectation. June data... is an imminent upturn, markets seem to be growing a bit more confident that the stimulus we've seen from Chinese authorities over the past six to nine months is actually working its way through the system," said Florian Hense, European economist at Berenberg in London.

Regional chipmakers gained after a senior U.S. official said the United States may approve licenses for companies to re-start new sales to blacklisted Chinese telecoms equipment maker Huawei HWT.UL in as little as two weeks. IFXGn.DE , ASM ASMI.AS and STMicroelectronics STM.MI rose between 0.6% and 3.7%.

Shares of Belgian-Dutch biotech firm Galapagos NV GLPG.AS jumped 19% to a record high after U.S. drugmaker Gilead Sciences Inc GILD.O said it would invest $5.1 billion in the company. stocks .SX7P ended flat, drawing little cheer from U.S. lender Citigroup (NYSE: C ) Inc's C.N better-than-expected results, as Italian banks .FTIT8300 dragged. will turn to earnings from heavyweights in Europe, with technology major SAP SAPG.DE , semiconductor player ASML ASML.AS and drugmaker Novartis NOVN.S among those due to report second-quarter results this week.

Companies listed on the pan-European STOXX 600 index are expected to report 0.8% earnings growth in the second quarter, down sharply from an estimate of 1.8% a week ago, according to data from I/B/E/S Refinitiv.

Falling the most of the STOXX 600 was shares of British software company Micro Focus MCRO.L , which fell 5.7% on news its executive chairman sold 11.6 million pounds of the company's shares.

Meanwhile, Anheuser-Busch InBev ABI.BR dropped after it pulled the planned listing of its Asia Pacific unit in Hong Kong, Budweiser Brewing Company APAC Ltd 1876.HK , in what would have been the world's biggest initial public offering of 2019.

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