BUSINESS

European shares bounce back on Greek reforms, but miners slump

DANILO MASONI

TAGS: Markets

European shares rose on Monday, bouncing back after two weeks of losses and supported by gains in crude oil prices and by the approval in Greece of reforms to help unlock bailout money.

Gains however were capped by heavy losses among miners following disappointing data from China, a major metal consumer.

"The oil prices rally and the moderately positive developments in Greece are helping but uncertainty over the macro picture remains," ActivTrades chief analyst Carlo Alberto de Casa said.

China's exports and imports fell more than expected in April, underlining weak demand and cooling hopes of a recovery in the world's second-largest economy.

The data weighed particularly on mining stocks with the STOXX 600 Basic Resources index falling by more than 2.7 percent, topping sectoral losers in Europe.

The pan-European FTSEurofirst 300 index rose 1 percent by 0837 GMT, while Athens benchmark index rose as much as 1.4 percent to hit its highest point since Jan. 5.

Greek lawmakers on Monday passed by a thin margin a package of unpopular pension and tax reforms that the country's leftist-led government hopes will persuade official creditors to unlock bailout cash.

"There is quite some relief where Greece is concerned as it wasn't necessarily a given if parliament would pass the new measures," Markus Huber, trader at City of London Markets said.

Among the leading gainers, Volkswagen rose 2.1 percent after activist investor TCI demanded the German carmaker overhaul its "excessive" executive pay scheme as part of a plan to boost profits and end years of what it called mismanagement.

Among top fallers, Brenntag fell 6.3 percent after reporting a 27 percent drop in first-quarter net profit due to a massive devaluation of the Venezuelan bolivar.

Milan's blue chip index fell 0.15 percent, led lower by Banco Popolare amid expectations of weak first-quarter results and with its 1 billion euro cash call getting closer.

Shareholders in the Italian mid-tier bank approved on Saturday a capital increase that is part of a planned merger deal with fellow lender Popolare di Milano.

[Reuters]

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