Stockmarkets have opened higher in the UK and Europe this morning, avoiding the sell-off seen overnight in Asia on concerns over a credit crunch in China.
Monday’s session began with the FTSE 100 rising 1.02 per cent to 6,440.69 by 0830 BST with Lloyds Group, Arm Holdings, Tullow Oil, Barclays and Persimmon leading the risers straight after opening.
The Euro Stoxx 50 gained 1 per cent to 2,621.99, while the German Dax was ahead 1.36 per cent at 7,911.39 and the French Cac 40 was up 0.9 per cent to 3,787.45.
This is in sharp contrast to the picture in Asia, where investors remain concerned over the impact of soaring interbank lending rates on the health of the world’s second largest economy.
The Shanghai Composite Index shed 2.44 per cent last night to close at 1,958.27 while the Nikkei 225 was down 1.40 per cent to 14,109.34. As of 0830 BST, the Hang Seng had fallen 1.53 per cent to 20,535.44.
Finaport Investment Intelligence chief investment officer for Asia Hans Goetti told Bloomberg: “The biggest concern is whether this will lead to a deleveraging cycle where lending and borrowing become more difficult and then the economy slows dramatically into the later part of the year.”
Worries about a possible tapering of the Federal Reserve’s bond-buying programme also remains a drag on sentiment, especially after data published last week showed US employers created more jobs than expected in June.