European stocks open higher as Asian markets rebound on strong China data

European stocks traded higher earlier on Friday after strong factory data from China fuelled a rebound in Asian markets. However, investor optimism remained limited as the U.S. reported a record surge in new COVID-19 cases.

The STOXX 600 gained 0.2%, remaining steady near its strongest level in three weeks. However, gains were limited by a U.S. holiday.

Technology stocks led the rally, gaining up to 0.8%. Meanwhile, banks and insurers saw the biggest declines.

The pan-European index was on the way to a substantial weekly gain after strong data raised hope for an economic recovery. However, with the U.S. seeing a record surge in COVID-19 cases on Thursday, many states have decided on delaying reopening plans.  

Germany’s takeaway food service Delivery Hero gained 4.1%, seeing its new order size grow twofold during the second quarter.

U.K. retailer Next lost 3.0% after Goldman Sachs downgraded its stocks to “sell”. Meanwhile, AB Foods’ stocks fell by 1.3% after the U.S. bank downgraded it to “neutral”.