European stocks rise as investors turn to tech shares

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European stocks pushed higher on Monday as gains for the tech sector drew investors’ attention away from China’s flagging property market and slowing post-pandemic recovery.

Europe’s region-wide Stoxx 600 rose 0.1 per cent, recouping early losses. France’s Cac 40 added 0.2 per cent and Germany’s Dax climbed 0.5 per cent.

Shares in Amsterdam-based Philips led gains in Europe, up 4.7 per cent, after the billionaire Agnelli family took a 15 per cent stake in the Dutch group to support its pivot from electronics to health technology.

Equities declined in Asia after property developer Country Garden suspended trading in at least 10 of its mainland bonds over the weekend.

The company, once the largest developer in China by sales, missed international bond payments last week, bolstering investor fears that a two-year liquidity crisis across the country’s real estate sector was threatening to escalate.

Hong Kong’s Hang Seng index fell 1.6 per cent with the Hang Seng Mainland Properties index, which tracks China’s real estate developers, down 3.7 per cent. In mainland China, the benchmark CSI 300 was down 0.7 per cent.

“Ongoing difficulties in the Chinese property sector are exacerbating last week’s poor set of Chinese data, which included deflation, trade and new loans,” said Chris Turner, head of foreign exchange strategy at ING. 

The moves come after Chinese equities experienced their steepest fall since March last week, as a string of economic data releases signalled the country was slipping into deflation. Exports declined and its banks issued the lowest amount of new loans since the 2008 financial crisis. More data is expected this week, with the release of China’s retail sales and industrial production figures.

Elsewhere in Asia, Japan’s Topix lost 1 per cent and South Korea’s Kospi slipped 0.8 per cent.

Weak economic data put pressure on oil prices, as investors fretted over global demand for fuel. International benchmark Brent crude fell 0.8 per cent to $86.16 a barrel, while US marker West Texas Intermediate declined by the same margin to $82.51.

US futures contacts tracking the benchmark S&P 500 rose 0.2 per cent while those tracking the tech-focused Nasdaq 100 added 0.4 per cent ahead of the New York open.