Exciting news in the world of European stock markets today as they saw a significant rise on Thursday. The optimism was fueled by the gains in Asia overnight, particularly due to the optimism over additional Chinese stimulus measures.
At 03:05 ET (07:05 GMT), major European indices were on the rise. The DAX in Germany traded 1.1% higher, the CAC 40 in France rose 1.2%, and the FTSE 100 in the U.K. climbed by 0.6%.
Could More Chinese Stimulus Be on the Horizon?
The positivity in the European markets was a direct result of the upbeat trading in Asia overnight. Japan’s Nikkei and the major Chinese indices all closed with gains of over 2%. This news comes on the heels of a report from Bloomberg News suggesting that Chinese authorities are considering a $142 billion infusion to assist big lenders, in addition to the stimulus measures announced earlier in the week.
These developments indicate that Chinese leaders are recognizing the need for further action to boost the economy towards the official 5% growth target. This is particularly important for Europe, as China is a key export market for many of the continent’s leading companies.
SNB Looks Set to Cut Rates Again
Recent data has revealed that the ZEW Economic Sentiment for Germany came in at -21.2, slightly better than the predicted -22.4. However, this still indicates that the German economy, the largest in the eurozone, is facing challenges.
Thursday’s focus will likely be on the rate decision by the Swiss National Bank (SNB), along with speeches from officials at the Federal Reserve and European Central Bank. The SNB is expected to lower rates by 25 basis points, marking the third consecutive meeting of cuts.
H&M Adjusts Earnings Goal
In the corporate sector, H&M saw its stock drop over 7% after announcing that it no longer expects to reach its full-year earnings margin goal. Similarly, German chemicals company BASF has revised its dividend proposal for the 2024 business year as part of a new corporate strategy.
Crude Prices Take a Hit
Oil prices experienced a decline as reports emerged that Saudi Arabia is considering abandoning its high crude price target in favor of boosting production. By 03:05 ET, Brent crude fell 2.3% to $71.25 per barrel, while WTI crude traded 2.4% lower at $68.05 per barrel.
The market also reacted to news of potential increased supply from Libya, as delegates agreed on appointing a new central bank governor, resolving a crisis that had taken a significant amount of production offline. Despite reports of a more-than-expected decrease in U.S. oil inventories, the market remained focused on the shift in Saudi Arabia’s approach to pricing.