By Sruthi Shankar
(Reuters) -European shares hit three-week highs on Monday, as investors were optimistic that a slew of stimulus measures from China will support its slowing economy, while Novo Nordisk’s shares hit a fresh record high.
The pan-European STOXX 600 index rose 0.8% following a three-day run of losses.
Miners rose 1.8%, leading gains among European sectors, as iron ore futures rallied on optimism over top steel producer China’s policy support for its struggling property sector. [IRONORE/]
China stepped up measures to boost the country’s faltering economy, with top banks paving the way for further cuts in lending rates and sources saying Beijing plans further action, including relaxing restrictions on home purchases.
“Investors are increasingly positive on the economic reforms enacted last week around the mortgage market,” Peter Garnry, head of equity strategy at Saxo Bank, said in a note.
“This week’s focus is on whether Chinese equities will continue to rally and whether energy markets will remain strong.”
Oil stocks edged up 0.3% as crude prices stabilised on expectations that major producers would keep supplies tight. An official announcement is expected this week. [O/R]
European stocks erased a part of their losses in August as recent economic data fuelled expectations that major central banks were nearly done with their interest rate hikes.
Friday’s data showing a jump in U.S. unemployment rate cemented bets of the Federal Reserve keeping interest rates unchanged at its policy meeting later this month.
U.S. markets are closed on Monday on account of Labor Day.
Investors also scaled back bets that the European Central Bank will hike interest rates by another 25 basis points in September, as euro zone inflation held steady in August.
Novo Nordisk rose 1.7% to hit a record high after the Danish drugmaker launched its weight-loss injection Wegovy in Britain. Novo, with a market capitalisation of $424.7 billion, unseated LVMH as Europe’s most-valuable listed company on Friday.
Vonovia edged up 0.4% after Morgan Stanley upgraded the German real estate firm to “equal-weight” from “underweight”, saying the end of rate hike cycle could support the stock.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Eileen Soreng and Janane Venkatraman)