Europe midday: Luxury shares drive Stoxx on China stimulus

26th Sep 2024 11:46

(Sharecast News) - European stocks rallied on Thursday with luxury stocks in focus as China pledged to step up fiscal support after introducing stimulus measures earlier in the week.

The pan-European Stoxx 600 index was up 1.04% at 524.56 as it nudged within sight of record territory. Germany's DAX and Britain's FTSE 100 also posted strong gains.

China's ruling politburo pledged to increase fiscal support for the domestic economy, giving rise to optimism that more intervention was on the way in a week where the country's central bank unveiled a swathe of stimulus including rate cuts.

"The most recent actions suggest that the authorities are feeling a sense of urgency as Beijing's 5% economic growth objective for the year begins to elude them," said Patrick Munnelly at Tickmill Group.

"Nevertheless, investors found cause for optimism. After months of market anticipation, the Chinese authorities are finally acknowledging the significant amount of work needed to relaunch the world's second-largest economy."

Elsewhere, investors will be keeping an eye on US weekly jobs data and a speech by US central bank chief Jerome Powell.

Brent crude prices fell 3% to $71 on rumours Saudi Arabia was set to abandon its unofficial price target of $100 per barrel, with an unwinding of voluntary production cuts starting in December.

In equity news, French videogame maker Ubisoft slumped by almost a fifth after the company postponed the release of 'Assassin's Creed Shadows' by three months to February 14 and cut net bookings guidance.

On the positive side, luxury goods stocks, all heavily exposed to the Chinese market, were once again in favour.

Burberry, Remy Cointreau, Kering, LVMH, Christian Dior, Moncler, Hermes, and Watches of Switzerland all made strong gains.

Reporting by Frank Prenesti for Sharecast.com