China data drives early gains in European stocks

(Reuters) – European shares inched higher on Monday as a decline in China’s producer prices slowed and oil prices rose, while investors looked to Washington for signs of more U.S. stimulus.

The pan-European STOXX 600 index <.STOXX> rose 0.3% by 0712 GMT, kicking off a week that could see subdued trading activity as traders head out for summer holidays.

Sectors considered more sensitive to economic health such as banks <.SX7P>, oil and gas <.SXEP> and automakers <.SXAP> rose as data showed China’s factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels.

Shares in energy majors BP , Royal Dutch Shell and Total rose nearly 2% as crude prices gained after Saudi Aramco <2222.SE> raised optimism about Asian demand and Iraq pledged to deepen supply cuts. [O/R]

French engineering company Spie jumped 5.7% after a double upgrade to “buy” from Jefferies, while Dutch tech investor Prosus slid for a third day running as U.S. prepares ban on two popular Chinese apps, WeChat and TikTok.

Heavyweight sectors like technology <.SX8P> and healthcare <.SXDP> fell 1% and 0.4%, respectively, limiting gains in the broader market.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)