In This Article:
* Euro STOXX 600 gains 0.5%
* Oil and gas index up 2.1%
* Chinese data stokes bode well for global recovery - analysts
* Gains checked by U.S.-China tensions, wait for U.S. stimulus
* Tech sector falls 0.1% on tensions
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Tom Wilson
LONDON, Aug 10 (Reuters) - European shares rose on Monday as industrial activity in China gained strength, another sign of recovery from the coronavirus pandemic that added to hopes the global economy would also return to health.
The broader Euro STOXX 600 rose 0.6%, with London's FTSE buoyed 1% and European oil and gas shares climbing 2% on rising oil prices.
Shares in BP and Royal Dutch Shell rose 3.4% and 2.7% respectively after Saudi Aramco raised optimism about a growth in Asian demand and Iraq pledged to further cut supply.
Deflation at China's factories eased in July, data showed, driven by a rise in global energy prices and as industrial activity climbed back towards pre-coronavirus levels.
Industrial output in the world's second-biggest economy is steadily returning to levels seen before the pandemic paralysed huge swathes of the economy, driven by pent-up demand, government stimulus and surprisingly resilient exports.
That bodes well for the global recovery from the coronavirus pandemic, market players said.
"China is so much in advance in this process of lockdowns and exiting lockdown, that any good signs for the Chinese economy is essential (for the world economy)," said Florian Ielpo, head of macroeconomic research at Unigestion.
The MSCI world equity index, which tracks shares in 49 countries, gained 0.1%. Wall Street futures gauges pointed to a positive start.
But advances were checked by tension between the United States and China. Uncertainty about a deal on a U.S. stimulus package also weighed on markets
U.S. President Donald Trump signed executive orders banning Chinese social media platforms WeChat - owned by Chinese tech giant Tencent - and TikTok starting next month, and imposed sanctions on 11 Hong Kong and Chinese officials.
U.S. regulators also recommended that overseas companies listed on American exchanges be subject to U.S. public audit reviews from 2022.
The U.S.-China tensions has stoked fears about an adverse impact on trade talks. Any friction here could complicate the global recovery from the coronavirus pandemic, investors said.
Underscoring concerns, European tech shares lost 0.8% on the tension between Washington and Beijing, the only sector to fall in early trade.