European stocks rally as investors cheer China factory data

European stocks rallied on Friday after investors found comfort in China’s report of an increase in April’s factory activity, exceeding analysts’ forecasts. However, with the simmering trade tensions between the U.S. and China, many speculate that it would lead the shares market to weekly declines.

The pan-European STOXX gained 1.4% at 0715 GMT, with travel stocks leading the sectorial rally with a 2.7% climb.

Miners and chipmakers in China saw a surge after the world’s second-largest economy reported a 3.9% increase in industrial output in April year-on-year compared to a forecasted 1.5%.

However, global stock markets fell in May as fears mounted over a potential second wave of COVID-19 cases in Asia.

Swiss drugmaker Roche’s shares also supported market gains after it climbed by 1.4% on Friday. Roche said that it would start selling new digital diagnostics products that could streamline the screening of COVID-19 patients.

Shares of U.K.-based telecoms company BT Group Plc soared by 8.2% after they had announced that they were closing in on a multi-billion Pound deal. The BT Group said that they would be selling Openreach, its network subsidiary to infrastructure investors.