Europe's STOXX 600 watches all-time close on rising China pressure By Reuters
By Pranav Kashyap and Shashwat Chauhan
(Reuters) – European shares jumped on Thursday, as Chinese shares were exposed as comforting and miners outperformed on news of China's aggressive economic stimulus, while chip shares also advanced following a strong earnings forecast from US company Micron.
The pan-European index closed 1.3% higher at 525.61 points, an all-time close and 0.2% away from an intraday record high.
China's leaders have pledged to use “necessary funds” to meet this year's economic growth target of around 5%, acknowledging new challenges and raising market expectations for fresh momentum beyond measures announced this week.
“This is a positive market reaction that will probably fade over time because the issues around Chinese demand will take time to resolve,” said Tim Graf, managing director and head of EMEA strategy at EMEA. State Street (NYSE:) Global Markets.
“You see a small circle of help that there are efforts being made to solve it, but it's still a very long process.”
Luxury firms exposed to China such as LVMH and Hermes gained about 9% each. The gauge of Europe's top ten luxury firms rose by 6.5%.
Mining stocks also jumped 4.3% on higher metal prices. [MET/L]
Europe's tech sector gained 3% as shares of semiconductor companies jumped after Micron Technology (NASDAQ: ) forecast better-than-expected revenue on AI demand.
Bucking the trend, heavyweight energy stocks fell 3% as prices fell more than 2% on media reports that Saudi Arabia will drop its price target to prepare for a production increase, and as OPEC+ looks set to raise production in December. [O/R]
In Switzerland, the country's central bank cut interest rates by 25 basis points, echoing measures to reduce borrowing costs by the European Central Bank (ECB) and the US Federal Reserve, and leaving the door open to further rate cuts as inflation cools further. The Swiss benchmark closed up 1.4%.
Policy doves at the ECB are preparing to push for an interest rate cut next month after a string of weaker-than-expected economic data, a move likely to meet opposition from their conservative peers, seven sources told Reuters.
Deutsche Bank said it now expects an accelerated ECB rate-cutting cycle, with back-to-back rate cuts from December.
Swatch Group (SIX:) jumped 12.1% when a trader pointed to a report that the Swiss watchmaker could be delisted.
Germany's Commerzbank (ETR: ) gained 6.9% after the lender confirmed its strategy through 2027, and said it aims for a payout ratio of more than 90% in the years 2025 to 2027.
H&M ( ST: ) fell 4.6% after the world's second-largest fashion retailer dropped its 2024 target.
