European markets open higher despite nerves over China; Fed meeting ahead

European stocks opened higher on Tuesday, bouncing back from heightened investor nerves over a Chinese property developer and ahead of a two-day meeting of the U.S. Federal Reserve

The pan-European Stoxx 600 index opened 0.4% higher and then rose to trade 0.7% higher with all sectors in positive territory, apart from healthcare stocks

Basic resources and oil and gas stocks were the best performers on the index amid consumer and business worries over a shortage of natural gas in the region, as well as media stocks

Universal Music Group shares surged in its stock market debut on Tuesday which marked Europe’s largest listing, so far, of 2021. The company opened trading at around 25.05 euros ($29.37) per share, more than 35% above the reference price of 18.5 euros per share

Airline groups IAG and Lufthansa and travel retailer Dufry were among the best performers on the index, perhaps boosted by the U.S.′ announcement on Monday that it is to ease travel restrictions on fully vaccinated travelers from the U.K. and EU

Shares of British DIY group Kingfisher were trading 4.2% lower, making it among the worst performers on the Stoxx 600, despite the company reporting a 61.6% jump in first-half pretax profit largely thanks to a home improvement boom during the pandemic

The rebound for European stocks comes after markets got off to a poor start to the week, closing lower on Monday amid investor fears surrounding embattled property developer China Evergrande Group and concerns about the contagion risk for the wider Chinese and global economy

Read more: The global economy could feel the effects of China’s Evergrande crisis. Here’s what investors should know

Hong Kong equities saw a big sell-off during the Asia trading session on Monday with the benchmark Hang Seng index plunging 4% as the developer teetered on the brink of default. Shares of China Evergrande Group plummeted 10.24% during the Asian trading session, after falling as much as 17% earlier

Shares in Asia-Pacific were lower in Tuesday trade, with markets in mainland China and South Korea closed on Tuesday for a holiday

European markets were also rattled by sharp declines in the U.S. on Monday where stocks began the week deeply in the red as investors continued to flock to the sidelines in September amid fears over China, the Fed and Covid, with the pandemic set to become the most deadly outbreak in recent American history

Top of the agenda for investors on Tuesday is the start of the U.S. Federal Reserve’s highly anticipated September meeting. Fed Chair Jerome Powell will hold a press conference Wednesday at the conclusion of the two-day meeting with investors looking out for any indications about the Fed’s tapering of its easy monetary policy

Powell has said the tapering could occur this year but investors are waiting for more specifics, particularly after mixed economic data released since Powell’s last comments

There are no major or data releases in Europe on Tuesday