(Reuters) – Stocks in Europe and US equity futures surged on Thursday, following a positive trend in Asia after China announced plans for fiscal stimulus and technology shares saw gains.
The Stoxx 600 index in Europe jumped 1%, while Nasdaq 100 futures also saw an increase after Micron Technology Inc. reported strong revenue forecasts, boosting its stock in late trading. Asian equities also saw a significant surge of around 2%. US Treasuries and the dollar remained stable.
China’s announcement of fiscal spending plans, although lacking specific details, boosted overall risk appetite and improved the outlook for industries in Europe that have strong ties to the Chinese economy. This move came after concerns over deflation and weak consumption persisted despite previous monetary stimulus measures earlier in the week.
“Does it change the global story? We are not sure, but for now it’s surely good for the rest of the world,” said Kenneth Broux, a strategist at Societe Generale SA. “Individual stock names in Europe are up as people are betting the Chinese consumer will go out and spend, including on luxury items.”
Among the reported measures, China is considering injecting up to 1 trillion yuan ($142 billion) into its major state banks to enhance their ability to support the struggling economy. This would mark the first capital injection into big banks by Beijing since the global financial crisis in 2008.
Meanwhile, S&P 500 futures rose 0.7% as investors awaited a pre-recorded address by Federal Reserve Chair Jerome Powell at the 10th annual US Treasury Market Conference.
In other news, oil prices fell for a second consecutive day as Saudi Arabia reportedly considered increasing output, while factions in Libya reached an agreement that could lead to the resumption of some crude production.
Separately, the US, European Union, and key powers in the Middle East, including Saudi Arabia and Qatar, have proposed a three-week cease-fire between Israel and Hezbollah in Lebanon to facilitate negotiations and prevent a full-scale conflict in the region.
Key events to watch this week include:
- ECB President Christine Lagarde’s speech on Thursday
- US jobless claims, durable goods, revised GDP on Thursday
- Pre-recorded remarks by Fed Chair Jerome Powell at the 10th annual US Treasury Market Conference on Thursday
- China industrial profits on Friday
- Eurozone consumer confidence on Friday
- US PCE, University of Michigan consumer sentiment on Friday
Market movements:
- Stocks:
- Stoxx Europe 600 rose 1.1%
- S&P 500 futures rose 0.8%
- Nasdaq 100 futures rose 1.4%
- Dow Jones Industrial Average futures rose 0.4%
- MSCI Asia Pacific Index rose 2.1%
- MSCI Emerging Markets Index rose 1.8%
Currencies:
- Bloomberg Dollar Spot Index fell 0.2%
- Euro rose 0.2% to $1.1156
- Japanese yen fell 0.2% to 144.97 per dollar
- Offshore yuan rose 0.3% to 7.0112 per dollar
- British pound rose 0.2% to $1.3356
Cryptocurrencies:
- Bitcoin rose 0.5% to $63,810.38
- Ether rose 1.5% to $2,619.81
Bonds:
- 10-year Treasury yield declined one basis point to 3.78%
- Germany’s 10-year yield remained steady at 2.17%
- Britain’s 10-year yield remained steady at 3.98%
Commodities:
- Brent crude fell 2.4% to $71.67 a barrel
- Spot gold rose 0.1% to $2,660.44 an ounce
This article was written with the help of Reuters Automation.
–With contributions from Winnie Hsu, Divya Patil, and Richard Henderson.
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