Strong China import demand boosts Europe stocks

European stock markets extended gains into a third straight day on Wednesday, boosted by data showing Chinese demand for imports rose in March.

The Stoxx Europe 600 index XX:SXXP +0.93% rallied 1% to 290.81, adding to a 0.2% gain from Tuesday.

Shares of low-cost airline EasyJet PLCUK:EZJ +4.89% gained 4.1%, after Citigroup lifted the firm to buy from neutral, saying free-cash-flow generation bodes well for dividend growth and possible more special dividends.

On a more downbeat note, shares of France Télécom FR:FTE -0.56% slipped 0.8%, after Goldman Sachs moved the firm to its conviction sell list.

More broadly, investors in Europe investors eyed an unexpected Chinese trade deficit for March. Imports surged 14.1% from a year earlier, beating estimates of 6.1% growth and underlining that domestic demand in the world’s second-largest economy is improving. Exports rose 10%, below expectations of a 12% rise.

Resource shares climbed after the data, as China is major user of natural resources. Shares of heavyweight mining firm Rio Tinto PLC UK:RIO +1.01% RIO -0.06% AU:RIO +2.73% gained 1.3% in London, while oil group Total SA FR:FP +0.92% TOT +1.48% rose 1.2% in Paris.

After European market close, attention will turn to the Federal Reserve, which will release minutes from its latest policy-setting meeting.

“This should give us a clearer picture of what the Fed is looking for as a condition to scale back asset purchases,” analysts at Danske Bank said in a note.

“The latest payrolls report has pushed the theme a bit off the agenda, but it will likely arise again during the summer as we expect payrolls growth to stay close to the 200,000-per-month pace in coming months. We look for the Fed to start tapering off purchases around September/October,” they added.

U.S. stock futures pointed to a higher open on Wall Street.

European banks benefited from the positive sentiment and posted some of the biggest gains. Shares of Banco Popolare SC IT:BP +6.44%  climbed 6.2% in Milan, Société Générale SA FR:GLE +4.99%  jumped 5% in Paris and Deutsche Bank AGDE:DBK +2.14%   DB +2.23%  gained 2.4% in Frankfurt.

Among country-specific indexes in Europe, Germany’s DAX 30 index DX:DAX +1.01%added 1.2% to 7,730.71, while France’s CAC 40 index FR:PX1 +1.04% gained 1.3% to 3,718.01.

Shares of utility firm E.ON SE DE:EOAN +1.98%  rose 3.5% in Germany, after Morgan Stanley removed the company from its “bottom picks” and upgraded it to equal-weight from underweight, citing improved risk-reward outlook.

The U.K,’s FTSE 100 index UK:UKX +0.67% traded 0.7% higher at 6,358.58. Shares of heavyweight HSBC Holdings PLC UK:HSBA +0.59%   HBC +0.65%   HK:5 +1.24%  rose 1%.