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LONDON – European stocks rose to new record highs on Friday, tracking gains on news of China’s stimulus policies, while investors also assessed fresh inflation data.
London Stock Exchange data showed that at 12:12 noon London time, the pan-European Stoxx 600 index rose 0.3% to 527.03 points, giving up earlier gains after hitting a record intraday high of 527.69 points.
Chemical stocks and automobile stocks led the gains, each rising about 2%.
Previously, China’s stock market had its best week in nearly 16 years, with the mainland’s CSI 300 Index rising 15.7% this week. The last time the index had a big weekly gain was the week ending November 14, 2008.
China this week launched a massive stimulus package to boost growth and restore confidence in the world’s second-largest economy.
The People’s Bank of China says it is cutting interest rates Its seven-day reverse repo rate to 1.5%, the second decline in about three months and a sharp cut deposit reserve ratio The proportion of financial institutions increased by 0.5 percentage points.
In Europe, France and Spain both released preliminary data on Friday showing a sharp fall in unified inflation this month. The data raised expectations that headline inflation across the euro zone will fall sharply below the European Central Bank’s 2% target.
Statistics agency Eurostat is due to release euro zone inflation data for September on Tuesday.
stock trend
Take a look at individual stock trends, Italian Fashion Group’s stock Moncler ended up rising more than 8%, reaching the highest point on Europe’s benchmark index. Reuters reported that previously, French luxury giant LVMH reached an agreement to invest in Double R, an investment vehicle owned by Moncler. LVMH shares rose 1.5% after the news broke.
Meanwhile, shares in Spain’s Banco Sabadell fell nearly 5%. The bank is the target of a hostile takeover by BBVA, a large Spanish bank.
Banco Sabadell CEO César González-Bueno said in an interview with CNBC reporter Charlotte Reed on Thursday that BBVA’s proposal was “very unstable” and the price offered was “completely inadequate.” Earlier this week, BBVA CEO Onur Genç told CNBC that the acquisition was proceeding “as planned.”
European stocks closed 1.25% higher on Thursday, tracking gains in Asia-Pacific markets, which were boosted by stimulus measures announced by China earlier this week.
Meanwhile, U.S. markets’ attention turns to the August personal consumption expenditures price index, due for release on Friday. PCE is the Fed’s preferred inflation gauge. Economists expect the overall PCE to increase by 2.3% annually and 0.1% quarterly.
U.S. stock futures edged higher ahead of the release of key data.
—CNBC’s Lim Hui Jie contributed to this report.
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