Battered mining and technology stocks were the big winners from China’s move to support its stuttering economy and a plunging stock market that has sent shockwaves around the globe.
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The pan-European FTSEurofirst 300 index, which slumped 5.4 percent on Monday, was up 4.1 percent at 1120 GMT, as was the blue-chip Euro STOXX 50 index.
China cut its interest rates for the fifth time in nine months in a renewed effort to shore up economic growth.
The move erased some of the stock market’s heavy losses from a day earlier when concerns over a slowdown in China’s economy rattled global markets and knocked down the Dow Jones industrial average more than 588 points.
Nonetheless, there are causes to argue that a China slowdown won’t derail Germany’s financial system.
Utilities lagged. Energy company Pepco Holdings declined the most in the S&P 500 after regulators in Washington rejected its deal with fellow utility Exelon.
Ifo calculates its headline index on the basis of companies’ assessments of the current business environment and the outlook for the next six months.
However, gross domestic product (GDP) data also released on Tuesday by the nation’s statistics office (Destatis) underlined the key role played by exports in driving Germany’s growth rate and the risks ahead for the nation’s economic outlook from a slowdown in emerging economies, notably China.
“Neither the Greek crisis nor the new Chinese uncertainties and stock-market turbulence have been able to dent German business optimism”, said Carsten Brzeski, chief economist at ING Diba AG in Frankfurt. “What we are seeing now is a dress rehearsal of things to come”.
Deutsche Boerse and Lanxess climbed around 3 percent each.
Benchmark U.S. crude gained $1.02 to $39.26 per barrel in electronic trading on the New York Mercantile Exchange.
Tokyo’s Nikkei 225 also closed lower, sliding 4 percent. But other markets in Asia posted modest recoveries.
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Miners Glencore and Anglo American were up by between 6 percent and 8 percent, while German chipmaker Infineon and telecoms equipment player Nokia rose 6.5 percent.
