The Stoxx Europe 600 closed little-changed in London after rallying as much as 0.9% earlier in the session, with volumes thin. China is taking bigger steps to showcase its policy determination after a slew of piecemeal measures to support the housing market failed to halt a slide. Basic resources shares, travel and technology stocks outperformed, while more defensive utilities lagged.
Further stimulus from China is significant as European stocks slid last month amid concerns about the Asian country’s economy, on top of worries rates will peak higher than expected. Investors are also fretting about slowing growth in the region while inflation remains above the European Central Bank target.
“The measures will be helpful to avoid a more severe and sudden decline in GDP growth, but Chinese consumption will inevitably slow down,” said Susana Cruz, a strategist at Liberum Capital. “In Europe, this will be particularly bad for luxury goods — with their second best market, the US, also losing momentum — and car manufacturers.”
Her team expects more domestically-oriented stocks to do better in the next month, as well as everyday discretionary consumption.M&A Watch Europe: Nestle Sells Business; Monte Paschi Clash You want more news on this market? Click here for a curated First Word channel of actionable news from Bloomberg and select sources. It can be customized to your preferences by clicking into Actions on the toolbar or hitting the HELP key for assistance. To subscribe to a daily list of European analyst rating changes, click here.
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