European stocks advanced yesterday on new prospects of Chinese economic stimulus measures owing to weak growth data, while Italy pulled off a bond auction despite a ratings downgrade. At close, London’s benchmark FTSE 100 index of top companies was up 1.03% to 5,666.13 points, Frankfurt’s Dax 30 rallied 2.15% to 6,557.1 points while in Paris the CAC 40 rose 1.46% to 3,180.81 points. Rome’s FTSE Mib switched into positive territory following a successful Italian government debt sale, standing 0.96% higher at 13,715 points, despite an overnight downgrade from Moody’s. Madrid’s Ibex 35 index won 0.52% to 6,590.90 points, but with the Spanish government’s 10-year bond yields not far from the danger level of 7.0% at which other countries have had to ask for a bailout. US stocks were also higher yesterday on their way to breaking a six-day losing streak, with JP Morgan Chase surging more than 5% after reporting a $4.4bn loss on its mismanaged London derivatives trading operation. In midday trading, the Dow Jones Industrial Average was up 1.44%, the S&P 500-stock index added 1.31%, while the tech-rich Nasdaq gained 1.04%. “Markets around the world are higher today on hopes China will implement a new stimulus program following its latest GDP miss,” said Briefing.com. JP Morgan shares jumped as the company’s reported loss on its disastrous dividends hedging operation in April proved less costly than some estimates. The company announced second-quarter profit slid to $5bn, still a bumper profit but a drop of 9% compared with the same period last year. The European single currency gained from Thursday’s two-year dollar trough, trading at $1.2236. It had tumbled on to $1.2167 — which was the lowest level since June 30, 2010 — on jitters over debt-laden Spain. Italy meanwhile raised €3.5bn ($4.3bn) in three-year bonds at a sale yesterday, where the rate fell to 4.65% from 5.3% last month. But the rate for a long-term issue rose. In Paris shares in PSA Peugeot Citroen fell by almost 8%. This was the day after the car group announced a deep restructuring and 8,000 job cuts. Traders, who had marked the share up initially, turned tail because of unclear prospects for the struggling business and strong political and trade union hostility to the new strategy. Eurozone concerns were stoked overnight after Moody’s cut Italy’s government bond rating by two notches, citing the knock-on effects of a possible Greek exit from the eurozone and Spain’s banking woes. The agency reduced Italy’s rating from A3 to Baa2 — which is just two notches above junk-bond status. Gekko Global Markets trader Anita Paluch argued that the Moody’s downgrade was not a huge surprise. “The most recent Italy’s surprise downgrade by Moody’s also did not shake the markets massively as the reasons for the move are not new either,” she noted. Asian markets mainly gained yesterday after China reported its economy was slowing in line with expectations, quashing fears data would show a “doomsday” scenario of the country heading for a hard landing. Hong Kong stocks gained 0.35%, or 67.52 points, at 19,092.63, while Chinese shares closed flat, little affected by the widely-expected growth data. Reaction was muted in China, where the Shanghai index edged up just 0.02%, or 0.41 points, to finish at 2,185.90. Seoul jumped 1.54%, or 27.50 points, to finish at 1,812.89, while Sydney finished 0.35%, or 14.2 points, higher at 4,082.2. Tokyo was also flat, adding 0.05%, or 4.11 points, to finish at 8,724.12. China’s economy expanded at the slowest pace for more than three years as dire problems overseas started to hit home hard, official data showed yesterday, fuelling expectations of more stimulus moves. The economy grew 7.6% in the second quarter year-on-year, the National Bureau of Statistics said. That was the weakest rate since the world’s second-largest economy expanded by 6.6% during the depths of the global financial crisis at the start of 2009. “Since traders are clearly becoming accustomed to receiving substantially worse-than-expected data, any data which shows a slight negative deviation from expectation — as in the case of China’s current growth rate — helps to inject some hope into the markets,” said Spreadex trader Shavaz Dhalla.” In other Asian markets, Wellington fell 0.17%, or 5.99 points, to 3,495.41, Taipei fell 0.37%, or 26.66 points, to 7,104.27. Manila closed 0.18%, or 9.33 points, higher at 5,214.52. Singapore closed up 0.79%, or 23.52 points, at 2,995.56, Kuala Lumpur edged up 0.05%, or 0.89 points, to 1,626.38 Jakarta closed 0.89%, or 35.55 points, higher at 4,019.67 and Bangkok added 1.44%, or 17.16 points, to 1,210.29. from gulf times.