London: Europe's main stock markets rose on Tuesday, taking in their stride warnings by the IMF that the global economy faces weak growth and possibly severe damage should Britain quit the European Union as oil prices continued to rise.
Despite the Brexit warning London's FTSE 100 index rose by 0.7 percent, while both Frankfurt and Paris climbed 0.8 percent.
The International Monetary Fund cut its global growth forecast for the third straight quarter, lowering it by 0.2 percentage points from its January outlook to a sluggish 3.2 percent expansion for this year.
It said economic activity has been "too slow for too long," and called for immediate action by the world's economic powers to shore up growth.
The IMF said it was concerned over "fraying" unity in the European Union under pressure from the migration crisis and the "Brexit" possibility.
It said the eurozone should grow a modest 1.5 percent this year, down from the 1.7 percent it estimated in January, and slower than the 1.6 percent seen in 2015.
However the IMF raised its 2016 growth forecast for China, the world's second-largest economy by 0.2 percentage points to 6.5 percent, citing stimulus plans announced by the government.
Concerns about a sharp slowdown in China, which had supported growth across the world in recent years, had sparked a massive selloff in equities and commodities at the beginning of 2016.
But markets have been cheered by a recovery in the price of oil above $40 per barrel ahead of this weekend's summit of key oil producers to discuss freezing output levels and easing the supply glut.
While some analysts belive only a production cut, rather than a mere freeze, could permanently boost prices amid weak demand in the oversaturated market, prices have recovered strongly from the lows of below $30 per barrel struck in January.
Trustnet Direct market analyst Tony Cross said the "US earnings season may have started on a rather muted note, but oil prices continue to gush higher."
With prices of other raw materials also rising, "...this is once again galvanising sentiment right across the commodities sector," he said, pointing to a 9.2 percent gain in mining company Anglo American.
- Glum earnings expectations -
Wall Street stocks pushed ahead as the market prepared for a trove of earnings from big US banks, with the Dow Jones Industrial Average rising 0.9 percent approaching midday.
Alcoa got the earnings season off to a downcast open after the market close Monday, reporting a steep drop in first-quarter earnings on tumbling aluminium prices and announcing plans to cut as many as 2,000 jobs.
Prices of industrial commodities have been in retreat owing largely to slowing demand from China.
"Concerning the US earnings season, expectations have come down substantially over the past weeks and months mainly due to slowing global growth with little change expected in the months ahead," said Markus Huber, a trader at City of London Markets.
"Because of this many are worried that sooner or later weak corporate profits will drag stocks down too as many studies are pointing out that in the long-term share prices will follow earnings."
World markets have been unable to maintain their momentum after the bright run seen in March, with concern growing that central banks may be running out of tools to kick-start growth and inflation.
The euro slid against the dollar while a fall in the yen pushed Japan's stock market higher, leading a Asia-wide advance.
- Key figures around 1530 GMT -
London - FTSE 100: UP 0.7 percent at 6,242.39 points (close)
Frankfurt - DAX 30: UP 0.8 percent at 9.761,47 (close)
Paris - CAC 40: UP 0.8 percent at 4,345.91 (close)
EURO STOXX 50: UP 0.6 percent at 2,942.45
New York - Dow: UP 0.9 percent at 17,705.26
New York - S&P 500: UP 0.7 percent at 2,056.67
New York - Nasdaq: DOWN 0.5 percent at 4,855.54
Tokyo - Nikkei 225: UP 1.1 percent at 15,928.79 (close)
Shanghai - Composite: DOWN 0.3 percent at 3,023.65 (close)
Hong Kong - Hang Seng: UP 0.3 percent at 20,504.44 (close)
Euro/dollar: DOWN at $1.1388 from $1.1406 on Monday
Dollar/yen: UP at 108.61 yen from 107.94 yen
AFP
