European Markets Traded Higher Following China's Broad Stimulus Measures

Bridgette Randall
24 Sep, 2024
London

European markets traded higher following a broad list of monetary stimulus measures announced by the People's Bank of China.

Benchmark indexes in Paris, London, and Frankfurt advanced after China's central bank announced wide-ranging measures to revive economic growth towards the 5% target rate. 

The People's Bank of China lowered its commercial bank reserve ratio by 50 basis points, which would pump about $141 billion of additional liquidity, and lowered existing mortgage loan rates by the same amount that is likely to benefit about 50 million households. 

The central bank also said it is ready to lower the reserve ratio requirement by an additional 50 basis points by the year's end, if needed. 

The broad set of stimulus measures lifted market indexes in mainland China and in Hong Kong by 4%, and luxury stocks in Paris, London, and Milan advanced following the announcements. 

Market enthusiasm was muted after Germany's business morale dropped to an eight-month low in September. 

The Ifo Business Climate Indicator decreased to the lowest level since January to 85.4 in September from 85.6 in August. 

 

Europe Indexes and Yields

The DAX index increased by 0.5% to 18,945.45; the CAC-40 index rose by 1.1% to 7,607.80; and the FTSE 100 index rose by 0.3% to 8,279.67. 

The yield on 10-year German bonds edged higher to 2.16%, French bonds inched higher to 2.94%, the UK gilts edged up to 3.97%, and Italian bonds decreased to 3.51%.

The euro edged lower to $1.11; the British pound inched higher to $1.33; and the U.S. dollar weakened to 84.82 Swiss cents.

Brent crude increased $1.44 to $75.64 a barrel, and the Dutch TTF natural gas fell by €0.38 to €35.82 per MWh. 

 

Europe Stock Movers

Mining companies and luxury goods makers traded higher after China announced a raft of monetary measures to revive the faltering economic growth rate. 

Antofagasta plc rose 6.8% to 1,948.50 pence, Anglo American advanced 6.6% to 2,262.97 pence, and Glencore jumped 4.5% to 402.20 pence. 

LVMH gained 3.4% to €614.80, Hermes International jumped 3.8% to €2,007.0, and Kering SA added 3.5% to €232.05. 

Crude oil explorers advanced amid rising tensions in the Middle East and general weakness in the U.S. dollar. 

BP plc gained 0.1% to 412.25 pence, Shell PLC increased 0.2% to €31.24, and BHP Group Ltd. advanced 4.1% to 2,127.0 pence. 

TotalEnergies SE jumped 1.2% to €63.07, and the French energy company signed an agreement to supply 200,000 tons of LNG to HD Hyundai Chemical for seven years starting 2027. 

CRH PLC declined 0.1% to 6,838.0 pence, and the company announced the appointment of a new chief executive. 

Johnson Matthey PLC advanced 1.4% to 1,500.0 pence after the company said its previously announced stock repurchase plan of £125 million will commence today.