Europe midday: Shares rally as German exports rise; Bayer slumps

European shares rallied late in the morning session as a surprise rise in German exports helped offset worries over the lack of follow-through on China's recent stimulus measures.

The pan-regional Stoxx 600 was up 0.23% to 517.82 points with Continental bourses also rallying after a mixed start. Eyes will also be on the release of minutes from the US Federal Reserve’s last meeting later in the day.

US stocks finished higher overnight, with the Nasdaq outperforming the other main benchmarks as all Magnificent Seven heavyweights advanced.

The Dow rose 0.3%, rebounding slightly after retreating sharply from a record high the previous session, while the S&P 500 gained 1% and the Nasdaq jumped 1.5%.

Nevertheless, global equity markets were volatile earlier in the day after China’s National Development and Reform Commission underwhelmed failed to deliver more stimulus measures at their conference, causing stocks with heavy exposure to China to drop.

German exports unexpectedly rose in August thanks to strong demand from the UK and US. Exports increased by 1.3% in August compared with the previous month, according to data from the federal statistics office. Economists had expected a 1% decline. Germany’s foreign trade surplus widened to €22.5bn from €16.9bn in July, boosted by a sharp drop in imports, down by 3.4%.

In China, the Shanghai Composite fell 6.52%, despite Beijing insisting it could still hit its growth targets.

“The main concern was that the raft of measures announced prior to last week’s holiday – which had lit the fire under a moribund market – were not followed up with any specific actions from the authorities, or indeed further plans,” said Interactive Investor head of markets Richard Hunter.

In corporate news, Bayer shares fell after Washington state's senior court said it would review a case against its Monsanto unit over allegations that exposure to the firm's toxic chemicals caused brain injuries to three teachers.

Rio Tinto said it had struck a deal to buy Arcadium Lithium for $6.7bn, placing it among the main producers of the key component of electric vehicle batteries.

The mining giant said it was offering $5.85 a share in cash - a 90% premium to the stock’s closing price at the end of last week.

Reporting by Frank Prenesti for Sharecast.com