Investing.com - European stocks were sharply higher on Tuesday, led by sharp gains in the financial sector, even after the release of weak export data from China.
During European morning trade, the EURO STOXX 50 rallied 1.44%, France’s CAC 40 advanced 1.29%, while Germany’s DAX 30 jumped 1.40%.
Data released earlier showed that China's trade surplus widened to $60.2 billion last month from $43.0 billion in July, compared to estimates for a surplus of $48.2 billion.
Chinese exports slumped 5.5% from a year earlier, better than forecasts for a decline of 6.0%, while imports plunged 13.8%, far worse than expectations for a drop of 8.2%.
A slowdown in domestic demand indicated a recovery in the broader economy remains fragile and may need further government stimulus.
European equities had strengthened broadly after the European Central Bank indicated last week that it could expand its quantitative easing program amid increased downside risks to its inflation outlook.
Financial stocks were broadly higher, as French lenders BNP Paribas (PARIS:BNPP) and Societe Generale (PARIS:SOGN) rallied 1.43% and 1.64%, while Germany's Commerzbank (XETRA:CBKG) and Deutsche Bank (XETRA:DBKGn) surged 3.25% and 1.66%.
Among peripheral lenders, Italy's Intesa Sanpaolo (MILAN:ISP) and Unicredit (MILAN:CRDI) gained 1.66% and 0.88% respectively, while Spanish banks BBVA (MADRID:BBVA) and Banco Santander (MADRID:SAN) advanced 0.84% and 0.70%.
Elsewhere, Telefonica (MADRID:TEF) SA climbed 0.80% following reports the Spanish wireless provider is in talks to rent mobile-phone towers in Mexico from America Movil SAB’s Telesites unit to help lower the costs of improving coverage.
In London, FTSE 100 jumped 1.17%, as U.K. lenders tracked their European counterparts higher.
Shares in the Royal Bank of Scotland (LONDON:RBS) and Lloyds Banking (LONDON:LLOY) were up 1.27% and 1.37% respectively, while Barclays (LONDON:BARC) and HSBC Holdings (LONDON:HSBA) rallied 1.82% and 1.84%.
Mining stocks added to gains, as Glencore (LONDON:GLEN) rose 0.23% and Bhp Billiton (LONDON:BLT) advanced 0.84%, while Rio Tinto (LONDON:RIO) gained 1.04%.
Meanwhile, Amlin (LONDON:AML) skyrocketed 33.03% after MS&AD Insurance Group Holdings Inc. said it is considering buying the insurer.
On the dowside, Whitbread (LONDON:WTB) plummeted 2.46% after saying that sales at its Premier Inn division were below estimates.
In the U.S., equity markets pointed to a sharply higher open. The Dow Jones Industrial Average futures pointed to a 1.27% jump, S&P 500 futures signaled a 1.39% climb, while the Nasdaq 100 futures indicated a 1.34% gain.