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GLOBAL MARKETS-Shares climb as China industrial data offers hope for coronavirus recovery

Mon, 10th Aug 2020 09:09

* Euro STOXX 600 gains 0.5%

* Oil and gas index up 2.1%

* Chinese data stokes bode well for global recovery -
analysts

* Gains checked by U.S.-China tensions, wait for U.S.
stimulus

* Tech sector falls 0.1% on tensions

* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn

* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Tom Wilson

LONDON, Aug 10 (Reuters) - European shares rose on Monday as
industrial activity in China gained strength, another sign of
recovery from the coronavirus pandemic that added to hopes the
global economy would also return to health.

The broader Euro STOXX 600 rose 0.6%, with London's
FTSE buoyed 1% and European oil and gas shares
climbing 2% on rising oil prices.

Shares in BP and Royal Dutch Shell rose 3.4%
and 2.7% respectively after Saudi Aramco raised
optimism about a growth in Asian demand and Iraq pledged to
further cut supply.

Deflation at China's factories eased in July, data showed,
driven by a rise in global energy prices and as industrial
activity climbed back towards pre-coronavirus levels.

Industrial output in the world's second-biggest economy is
steadily returning to levels seen before the pandemic paralysed
huge swathes of the economy, driven by pent-up demand,
government stimulus and surprisingly resilient exports.

That bodes well for the global recovery from the coronavirus
pandemic, market players said.

"China is so much in advance in this process of lockdowns
and exiting lockdown, that any good signs for the Chinese
economy is essential (for the world economy)," said Florian
Ielpo, head of macroeconomic research at Unigestion.

The MSCI world equity index, which tracks
shares in 49 countries, gained 0.1%. Wall Street futures gauges
pointed to a positive start.

But advances were checked by tension between the United
States and China. Uncertainty about a deal on a U.S. stimulus
package also weighed on markets

U.S. President Donald Trump signed executive orders banning
Chinese social media platforms WeChat - owned by Chinese tech
giant Tencent - and TikTok starting next month, and
imposed sanctions on 11 Hong Kong and Chinese officials.

U.S. regulators also recommended that overseas companies
listed on American exchanges be subject to U.S. public audit
reviews from 2022.

The U.S.-China tensions has stoked fears about an adverse
impact on trade talks. Any friction here could complicate the
global recovery from the coronavirus pandemic, investors said.

Underscoring concerns, European tech shares lost
0.8% on the tension between Washington and Beijing, the only
sector to fall in early trade.

Earlier, Asian shares outside Japan seesawed
in holiday-thinned trade, staying below a six-and-a-half-month
peak touched last week. They were last up 0.1%.

WAITING FOR WASHINGTON

Causing further uncertainty for investors are ongoing talks
in Washington over a U.S. fiscal stimulus package that have
hobbled the U.S. dollar.

House Speaker Nancy Pelosi and Treasury Secretary Steven
Mnuchin on Sunday said they were open to restarting aid talks.

Trump has sought to take matters into his own hands, signing
executive orders and memorandums aimed at unemployment benefits,
evictions, student loans and payroll taxes.

With investors worried that the U.S. recovery may lag behind
those in other major economies, the dollar's two-year supremacy
has slipped.

Against a basket of currencies, the dollar was a fraction
firmer at 93.339 and still just above a two-year trough.

"The fresh stimulus provided by President Trump through
executive orders is better than none at all and provides a stop
gap solution," wrote analysts at MUFG in London.

For Reuters Live Markets blog on European and UK stock
markets, please click on:

(Reporting by Tom Wilson, editing by Larry King)

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