European stocks gain, supported by optimism about China’s ‎economy

European stocks rose yesterday, Tuesday, supported by gains in financial stocks and stocks of luxury product companies, as investors bet on promising expectations for the Chinese economy, but the statements of European Central Bank President Christine Lagarde limited these gains.

According to “Reuters”, the Stoxx 600 index closed up 0.1 percent, ending its six-day losing streak.

Chinese Premier Li Keqiang said that the growth of the economy in his country during the second quarter will be higher than the first, and it is expected to reach the annual growth target of about five percent.

These statements gave some relief to investors who had been anxious for days due to lower interest rates than expected in China and political instability in Russia after a rebellion that did not last long, as well as decisions to raise interest rates around the world, which may last for a longer period.

The financial sector was the biggest gainer on the Stoxx 600 index, due to the gains of companies with exposure to China such as HSBC and Prudential Insurance, and giant luxury products companies such as LVMH and Richemont, as their gains ranged between 0.6 percent. And 1.2 percent

Lagarde said that inflation in the euro area has entered a new phase that may last for some time, pointing to a long battle against price growth that is likely to weaken demand and force companies to curb prices.

“You saw the gains that had been made since early morning fade away, especially after Christine Lagarde spoke, because she once again reinforced the view that inflation is still very high,” said Susanna Streeter, head of money and markets at Hargreaves Lansdowne.

She added, “Certainty among investors has increased once again that the battle with inflation is not over yet.”

The health care index fell after Fresenius Medical Care, which specializes in kidney dialysis, plunged 5.5 percent.

The health care sector has been declining for weeks, dropping by nearly 2.9 percent this month

Siemens shares rose 2.3 percent, recouping some of its previous losses, after Goldman Sachs analysts maintained the stock’s “buy” rating.