european stocks rally on stimulus hope china rate cut
Last Updated : GMT 06:49:16
Arab Today, arab today
Arab Today, arab today
Last Updated : GMT 06:49:16
Arab Today, arab today

European stocks rally on stimulus hope, China rate cut

Arab Today, arab today

Arab Today, arab today European stocks rally on stimulus hope, China rate cut

Frankfurt's blue-chip DAX 30 index
London - AFP

European stock markets rallied Friday on expectations of further economic stimulus for the eurozone and China's decision to slash interest rates in the world's second-biggest economy.

The eurozone's main stock markets in Frankfurt and Paris rose briefly by three percent in early afternoon trades before dipping back slightly by mid-afternoon amid hints of new economic stimulus from the European Central Bank.

The blue-chip DAX 30 index was up 2.76 percent at 10,781.1 points while the CAC 40 adding 2.55 percent to 4,924.59 points, also buoyed by a key business survey showing eurozone economic activity accelerated in October, in one of the best performances in four years.

London's benchmark FTSE 100 index meanwhile won 1.29 percent to stand at 6,458.72 points.

Market sentiment was also boosted by news that the People's Bank of China was trimming interest rates by 0.25 percentage points and its reserve requirement ratio by 0.50 percentage points.

The PBoC also abolished its official cap on interest rates for savers as Beijing seeks to address slowing growth.
FXTM Research Analyst Lukman Otunuga described the Chinese move as a shock that "not only further fuels the mounting concerns about the economic deceleration in the world’s second largest economy but raises questions about its Q3 GDP of 6.9%, and shows how the PBoC is willing to do all it can to ensure that the 7% end of year growth target is reached."

On the European stimulus front, ECB chief Mario Draghi had Thursday hinted at further stimulus measures, saying the central bank would reassess its monetary policy at its next meeting in December.

US stocks were solidly higher on opening Friday as Microsoft and other technology giants reported strong earnings.

Five minutes into trade, the Dow Jones Industrial Average stood at 17,614.00, up 0.71 percent.

The broad-based S&P 500 rose 0.93 percent to 2,071.56, while the tech-rich Nasdaq Composite Index jumped 1.85 percent to 5,010.83.

Microsoft surged 10.4 percent after reporting earnings for the quarter ending September 30 of $4.6 billion, up two percent and above expectations.
- 'ECB money train' -
"European shares got another healthy pump higher from investors on Friday, with major European averages all up... having already surged over two percent the previous day," said Jasper Lawler, analyst at trading group CMC Markets.

"The ECB money train is about to leave the station and the markets are jumping on board," said Lawler, commenting ahead of the news from China.

Asia stock markets and emerging currencies had already surged ahead on ECB hopes ahead of Beijing's post-close announcement.

On the currency markets, the euro recovered to stand at $1.1028, after hitting a two-month low of $1.1072, amid the prospect of more euros flooding the market weighing on the single currency.

"The euro has weakened sharply following yesterday's ECB monetary policy meeting," said Lee Hardman, currency analyst at Bank of Tokyo-Mitsubishi UFJ.

Helping the euro to recover later Friday was a key business survey showing that eurozone economic activity accelerated in October, in one of the best performances in four years which included a notable improvement in employment.

Data monitoring company Markit said its closely watched composite Purchasing Managers Index rose to 54 points compared with 53.6 points in September, well above the 50-point boom-or-bust line.

The recent gains for equities meanwhile come after global markets suffered their worst quarter in four years during the July-September period owing to worries about the slowing Chinese economy.

In shares price movement Friday, Sweden's Volvo climbed 2.6 percent after the world's second-biggest truckmaker unveiled a doubling of third quarter net profits.

On the downside, TalkTalk shares plunged 6.89 percent to 250 pence after the telephone and broadband provider was hit by a "significant and sustained" cyberattack according to the company.

burs-bcp/cw/boc

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european stocks rally on stimulus hope china rate cut european stocks rally on stimulus hope china rate cut

 



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european stocks rally on stimulus hope china rate cut european stocks rally on stimulus hope china rate cut

 



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