European stocks climb, oil rebounds but China concerns linger

LONDON: European stock markets rose Tuesday following losses in Asia as traders weighed strong earnings news against the potential impact of Covid's Delta variant on the economic recovery.

Oil prices rebounded but did not make much of a dent in Monday's sharp losses, as the reimposition of lockdowns and other restrictions in several countries including China raised demand concerns.

The dollar dropped against its main rivals looking ahead to key US jobs data later in the week.

Dollar down again

While corporate earnings continue to impress -- with BP and car giant Stellantis posting bumper profits Tuesday -- trader optimism has taken a knock after a series of below-forecast readings from the world's biggest economies.

London's benchmark FTSE 100 index was up around half-a-percent in midday deals, "led by BP swinging back into profit", noted Russ Mould, investment director at AJ Bell.

However a surge in Covid cases across economic powerhouse China had added to worries on trading floors.

"The rise in US cases, and (Southeast Asia's) situation, is well known, but what is spooking markets is China," said OANDA's Jeffrey Halley.

"It's not a huge reach to extrapolate even more supply chain disruptions, especially if it proves as elusive to control for Chinese authorities as it has to officials globally."

Hong Kong and Shanghai also continue to be buffeted by uncertainty caused by China's crackdown on the tech, private tuition and property sectors, which has raised worries that officials will target other industries.

Asian stocks fall again as China woes top upbeat recovery outlook

Gaming firms appeared to be next in the crosshairs after a state-run media commentary described online games as "spiritual opium".

"Fears over Chinese regulatory interference aren't going away, with Tencent the latest stock to slump on chatter about Beijing seeking to wield its power," added analyst Mould.

News that Hong Kong was to ease travel restrictions, which could provide a boost to the fragile economy, was unable to stop the city's Hang Seng Index from suffering another drop.

But Indian markets hit fresh all-time highs spurred by hopes of an economic rebound in Asia's third-biggest economy.

The benchmark Nifty 50 index surpassed the 16,000-point mark for the first time while the Sensex hit a fresh record high of 53,542.

At the same time, long-running fears that inflation could spike for months to come is fanning talk that central banks will be forced to taper their huge stimulus programmes that have driven rallies for equities.

Key figures around 1100 GMT

London - FTSE 100: UP 0.4 percent at 7,106.78 points

Frankfurt - DAX 30: UP 0.2 percent at 15,594.80

Paris - CAC 40: UP 1.0 percent at 6,740.11

EURO STOXX 50: UP 0.2 percent at 4,123.62

Tokyo - Nikkei 225: DOWN 0.5 percent at 27,641.83 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 26,194.82 (close)

Shanghai - Composite: DOWN 0.5 percent at 3,447.99 (close)

New York - Dow: DOWN 0.3 percent at 34,838.16 (close)

Euro/dollar: UP at $1.1887 from $1.1874 at 2050 GMT

Euro/pound: DOWN at 85.32 pence from 85.49 pence

Pound/dollar: UP at 1.3932 from 1.3885

Dollar/yen: DOWN at 109.16 yen from 109.34 yen

Brent North Sea crude: UP 0.4 percent at $73.21 per barrel

West Texas Intermediate: UP 0.4 percent at $71.57 per barrel