Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

European Stock Futures Surge Higher; Chinese Rate Cut Boosts Sentiment

Stock Markets May 20, 2022 02:04AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters

By Peter Nurse 

Investing.com - European stock markets are expected to open sharply higher Friday, following the positive lead from Asia after China cut a key lending benchmark, seeking to support its ailing economy.

At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 1% higher, CAC 40 futures in France climbed 0.9% and the FTSE 100 futures contract in the U.K. rose 1.1%.

European equities are set to take their lead from gains in Asia overnight, with Hong Kong’s Hang Seng index up 2.2% and Japan’s Nikkei 1.3% higher, as a result of China cutting its five-year loan prime rate by 15 basis points earlier Friday, the largest cut on record.

That rate is used as a reference rate for mortgages, and the cut, the second reduction this year, comes as Beijing seeks to revive the troubled housing sector to prop up the second-largest economy in the world.  

China's economy, a key global growth driver, is widely expected to shrink this quarter from a year earlier, compared with first quarter's 4.8% growth, with the property sector seen as a key drag on growth on the back of COVID-related mobility restrictions. 

Back in Europe, the economic news was more mixed. 

U.K. retail sales rose 1.4% on the month in April, much stronger than the expected fall of 0.2%, while dropping 4.9% year-on-year, ahead of the predicted  7.2% fall. 

However, German factory gate prices rose again in April, climbing 2.8% on the month, a hefty jump of 33.5% on the year, suggesting inflationary pressures will take some time to disperse. 

In the corporate sector, Zurich Insurance (SIX:ZURN) announced Friday it has agreed to sell its Russian business to members of the local team, with the Swiss insurer becoming the latest company to announce its exit from the Russian market. 

Luxury goods group Richemont (SIX:CFR) will also be in focus after strong American demand for its jewellery and watches boosted net profit and sales in the 12 months to March.

Oil prices edged lower Friday as concerns about weaker economic growth eclipsed expectations of a demand rebound in China as the world's top crude importer eased some COVID-19 lockdowns.

The crude market is on course to end the week on a negative note as investors, worried about rising inflation and more aggressive action from central banks, have been reducing exposure to riskier assets.

By 2:05 AM ET, U.S. crude futures traded 0.7% lower at $109.14 a barrel, while the Brent contract fell 0.5% to $111.52. 

Additionally, gold futures rose 0.2% to $1,845.50/oz, while EUR/USD traded largely flat at 1.0585.

 
 
 
European Stock Futures Surge Higher; Chinese Rate Cut Boosts Sentiment
 

Related Articles

Dow Futures Trade Lower After Positive Week
Dow Futures Trade Lower After Positive Week By Investing.com - Jun 26, 2022 3

By Oliver Gray  Investing.com - U.S. stock futures were trading lower during Sunday's evening deals, easing from a major rebound last week as investors monitored growing recession...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Ramesh Shah
Ramesh Shah May 20, 2022 3:21AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Buy oil on dip to $102 area
Paulo Levi
Paulo Levi May 20, 2022 2:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
China is feeling what US felt in 2008.
Mart Bab
Rubberduck1973 May 20, 2022 2:51AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
So much for fighting inflation. Very soon other central banks will follow. Buy as much gold as you can. We are heading for stagflation
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email