BERLIN, Jan 9 — European shares rose today, extending the year’s upbeat start to a second week, as China reopened its borders overnight and US and European data soothed nerves about aggressive tightening by major global central banks.

The pan-European STOXX 600 gained 0.5 per cent by 0923 GMT.

The index clocked its best weekly performance in over nine months on Friday after a clutch of positive data — including strong euro zone factory activity and a drop in the region’s headline inflation — indicated a milder-than-expected recession and easing price pressures.

That, along with data showing a tight US labour market, calmed fears that the US Federal Reserve and the European Central Bank would continue with their aggressive monetary policy tightening.

Rate-sensitive tech stocks rose 1.1 per cent.

Industrial production in Europe’s largest economy, Germany, rose slightly more than expected in November, adding to the optimism and lifting Germany’s DAX 0.3 per cent higher.

It plays into the rhetoric that’s been going on over the past week, which seems to suggest that maybe the recession in Europe is not going to be as deep and long-lasting as might have initially been thought, said Danni Hewson, financial analyst at AJ Bell.

"At a time when everyone has been really focused on the cost-of-living crisis, the engine underneath all of that noise seems to have actually been picking up quite nicely in a way that a lot of people feared it wouldn’t.”

Industrials rose 0.7 per cent, boosting the regional STOXX 600 index.

Investors now await the euro zone’s unemployment data for November at 1000 GMT for further cues on the strength of the labour market.

Travellers streamed into China by air, land and sea on Sunday, as Beijing opened borders that have been all but shut since the start of the Covid-19 pandemic.

Miners added 1.8 per cent as base metal prices advanced on hopes of demand recovery from top consumer China, while oil stocks gained 1.0 per cent on firm crude prices.

China-exposed financials, such as insurer Prudential rose 2.0 per cent.

UK’s commodity-heavy FTSE 100 added 0.2 per cent to hit its highest level since 2019.

Investors were nervous following a media report that the British government plans to scale back energy subsidies for businesses, said Hewson.

Among individual movers, AstraZeneca slipped 0.9 per cent as it struck a deal to buy US-based biopharmaceutical firm CinCor Pharma Inc for up to US$1.8 billion (RM7.8 billion) to strengthen its pipeline of heart and kidney drugs and grow beyond its mainstay cancer business.

London-listed video game companies Devolver Digital and Frontier Developments dropped 9.4 per cent and 40.1 per cent, respectively, after disappointing trading updates. — Reuters