European stock markets rose in a partial bounceback from large declines in response to turmoil in China.
The FTSE 100 rose 2.2% to 6,029 points in midmorning trading on Tuesday, taking the index of leading UK shares back above the 6,000 mark.
Mining shares, battered on Monday by fears about demand from China, were among the biggest risers. BHP Billiton, the world’s biggest miner, rose 6% and Anglo American gained 3.3%.
Germany’s Dax rose 2.8% and the French CAC 40 gained 3.1% % while leading shares in Italy rose 2.8%.
But the gains only made up some of the ground lost in Monday’s slump when the main indices all lost about 4%.
Analysts said European investors were taking a more considered view than on Monday when low August trading volumes exacerbated large swings in prices.
Simon Smith, chief economist at currency broker FxPro, said: “It makes little sense to try and rationalise these moves as they are a function of stressed and illiquid markets. That said, it’s clear that markets are waking up to the implications of a sustained economic slowdown in China, combined with a government that is stepping back from intervention, including in the stock market where the rally they initiated is now collapsing.”
The European rally followed more ructions in markets across Asia. Chinese shares suffered a dramatic fall and hundreds of billions of dollars were knocked off global stocks.
Monday’s selloff was triggered by worries about China after last week’s devaluation of the yuan and bleak manufacturing figures cast doubt on the authorities’ ability to manage the economy.
The Shanghai composite index fell 6.4% in the first few minutes of trading on Tuesday before clawing back ground later in the day, only to close down 7.6% at 2,964.967. Tokyo’s Nikkei closed down nearly 4% at 17,806.70, while Australia’s ASX closed up nearly 3% at 5,137.25.
Connor Campbell, an analyst at the spread betting business Spreadex, said: “After the market-wide panic of ‘Black Monday’ cooler heads seem to be prevailing this Tuesday morning as investors begin to pick up the pieces, even if China itself continues to struggle.”
