Europe stocks jump most in a month as miners rally on China data

[ZURICH] Europe's equities climbed the most in a month on optimism that China's economy is stabilizing.

Commodity producers - one of the only industry groups up for the year - led gains after data showed that China's exports jumped the most in a year and declines in imports narrowed. The UK market, rich in miners, advanced, with the FTSE 100 Index turning positive for 2016. Lenders, which suffered the most in the first quarter, surged 6.1 per cent.

The Stoxx Europe 600 Index climbed 2.5 per cent at 4:36 pm in London, with more than 500 of its members rallying. The gauge is extending a rebound after posting four consecutive weeks of losses, the longest run since 2014.

"It seems investors' appetite is coming back," said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. "The commodity sector is well supported after the good numbers out of China, and the talks getting close to a solution in Italy give a little support to the market too."

Yet Mr Galliker highlighted that the market remains fragile and sentiment could turn quickly if earnings reports disappoint. The Stoxx 600 has been trading in a tight range for the past month after halting its rebound since the Feb 11 low. As of Tuesday's close, the gauge traded at 14.8 times estimated profits, near a one-year low relative to the Standard & Poor's 500 Index.

Britain's FTSE 100 has been Europe's market leader this year, helped by the surge in commodity companies and a weaker pound. It joined developed markets from New Zealand, Canada and the US in erasing annual losses.

The benchmark index advanced 1.9 per cent on Wednesday, with Anglo American Plc, Rio Tinto Group and BHP Billiton Ltd up more than 7.5 per cent. Lenders Standard Chartered Plc and Barclays Plc also rallied more than 7 per cent. Berkeley Group Holdings Plc rose 2.7 per cent after London's biggest home builder won approval to develop as many as 652 homes at a parking lot in the west of the city.

Italy's FTSE MIB Index was the biggest gainer among markets in western Europe, up 4.1 per cent. Banca Monte dei Paschi di Siena SpA, Banca Popolare dell'Emilia Romagna SC and UniCredit SpA rallied more than 10 per cent. The nation came up with a plan to help the troubled firms, which led the industry down at the beginning of the year.

Elekta AB climbed 7.2 per cent after the Swedish maker of medial equipment named a new chief executive officer. Axa SA rose 6.5 per cent after people with knowledge of the matter said France's largest insurer is in talks to sell most of its UK life-insurance and wealth-investment units. Standard Life Plc, up 3.7 per cent, is bidding for its platform that helps UK independent financial advisers manage clients' investments, they said.

Premier Foods Plc tumbled 27 per cent, the most since October 2011, after McCormick & Co abandoned plans to make a takeover bid for it, saying the UK company's board wants too high a price. Tesco Plc sank 7.7 per cent after saying profit this year will be held back by the cost of improving its product range. WH Smith Plc fell 1.4 per cent after reporting a gross margin and revenue that misses analysts' estimates.

BLOOMBERG