European Stocks Rise on Boost from China Measures
European stocks rose on Tuesday, buoyed by news of economic stimulus measures from China and a jump in UK inflation. The Stoxx Europe 600 Index rose 0.6%, while the UK’s FTSE 100 Index gained 0.7%.
China Stimulus Measures
China announced a series of measures to support its economy, including tax cuts and increased spending on infrastructure. The news was welcomed by investors, who have been concerned about the impact of the US-China trade war on global growth.
The Chinese government said it would cut taxes and fees by 2 trillion yuan ($290 billion) this year, and increase spending on infrastructure projects by 1.3 trillion yuan. The measures are expected to boost economic growth and help offset the impact of the trade war.
UK Inflation
In the UK, inflation rose to its highest level in more than three years in August. The Office for National Statistics said the Consumer Prices Index (CPI) rose to 2.1% in August, up from 1.8% in July.
The rise was driven by higher prices for food and non-alcoholic beverages, as well as transport costs. The ONS said the increase was partly due to the weak pound, which has been hit by Brexit uncertainty.
European Markets
The news of China’s stimulus measures and the jump in UK inflation helped to boost European markets. The Stoxx Europe 600 Index rose 0.6%, while the UK’s FTSE 100 Index gained 0.7%.
In France, the CAC 40 Index rose 0.7%, while Germany’s DAX Index gained 0.5%. Italy’s FTSE MIB Index rose 0.4%, while Spain’s IBEX 35 Index gained 0.3%.
Sectors
The banking sector was the biggest gainer, with the Stoxx Europe 600 Banks Index rising 1.2%. The energy sector was also strong, with the Stoxx Europe 600 Oil & Gas Index rising 0.9%.
The healthcare sector was the biggest loser, with the Stoxx Europe 600 Healthcare Index falling 0.3%. The utilities sector was also weak, with the Stoxx Europe 600 Utilities Index falling 0.2%.
Currencies
The euro rose against the dollar, gaining 0.3% to $1.19. The pound also rose against the dollar, gaining 0.2% to $1.33. The yen was little changed against the dollar, trading at 109.3.
Outlook
The news of China’s stimulus measures and the jump in UK inflation have helped to boost European markets. Investors will be watching to see if the positive sentiment can be sustained in the coming weeks.
The US-China trade war is still a major concern for investors, and any further escalation could have a negative impact on global markets. The UK’s Brexit negotiations are also a source of uncertainty, and any developments in this area could have an impact on the markets.