🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

Europe's STOXX 600 at all-time high as China-exposed firms revel in stimulus boost

Published 09/27/2024, 03:37 AM
Updated 09/27/2024, 12:36 PM
© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, September 26, 2024.     REUTERS/Staff/File photo
FCHI
-
ES35
-
STOXX
-

By Pranav Kashyap and Shashwat Chauhan

(Reuters) -Europe's STOXX 600 share index closed at a record high on Friday as companies and sectors exposed to China continued to rally after Beijing unveiled a raft of stimulus measures this week, with luxury firms amongst the biggest gainers.

The pan-European STOXX 600 closed up 0.5% at 528.08, taking its gains for the week to more than 2%.

China-exposed sectors such as automakers and chemicals were among the biggest risers, each jumping more than 2%, reflecting the importance of the country to European companies.

China's central bank lowered interest rates and injected liquidity into the banking system as Beijing assembled a last-ditch stimulus assault to pull economic growth back towards this year's roughly 5% target.

"(China) sent a clear signal that stimulus will be stepped up across the board and turning the economy has the number one priority now," analysts at Danske Bank said.

"It is the biggest round of stimulus since the current crisis started three years ago and could turn out to be China's 'whatever-it-takes' moment."

Luxury firms LVMH and Richemont gained 3.7% and 2.7%, respectively.

A gauge of 10 of Europe's biggest luxury firms added 2.6%, lifting its weekly gain above 13%, the most since the index was created in 2016.

Moncler also rose 10.9% after French rival LVMH took a small stake in the Italian outerwear specialist.

Inflation eased more than expected in two of the euro zone's biggest economies, France and Spain, this month and the German jobs market continued to cool, adding to an already substantial case for the European Central Bank (ECB) to cut borrowing costs again next month.

Major brokerages, including Goldman Sachs and JPMorgan, now expect the ECB to deliver a quarter-point cut at its Oct. 17 meeting.

Yields on euro zone government bonds, which move inversely to prices, fell on Friday. [GVD/EUR]

© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, September 26, 2024.     REUTERS/Staff/File photo

Among other stocks, index heavyweight Novo Nordisk (NYSE:NVO) fell 4.6%, with two analysts pointing to JPMorgan's third quarter preview note that predicted the Danish drugmaker's results would fall short of consensus.

Britain's Cranswick jumped 6.7% after the meat producer forecast its annual profit towards the upper end of the market view.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.