Chinese Stimulus Hopes Give Markets a Boost
LONDON - Chinese stocks led the way Wednesday as investors grew more confident that policymakers in the world’s second-largest economy would back another batch of stimulus measures.
The catalyst to the optimism across the markets was a Chinese government pledge to maintain policies intended to strengthen the economy and an expression of willingness to "fine tune" them and make them more effective.
China’s main Shanghai Composite Index jumped 2.9 percent to 2,031.91 while the smaller Shenzhen Composite Index soared 3.8 percent to 771.72. Hong Kong’s Hang Seng joined in on the act too, ending 2.2 percent higher at 22,270.91.
Those gains helped shore up stock markets in Europe despite an unexpectedly big 1.2 percent monthly decline in retail sales across the 17 European Union countries that use the euro in October. However, the single currency fell on the news, and was trading 0.2 percent lower at $1.3076.
"As we saw following the global recession in 2008, a strong Chinese economy could help drive the recovery once again, with growth currently sluggish at best in most major economies," said Craig Erlam, market analyst at Alpari. "Any news which is pro-growth in China is always going to be well received in Europe and the U.S."
In Europe, the FTSE 100 index of leading British shares was up 0.3 percent at 5,888 while Germany’s DAX rose 0.2 percent to 7,449. The CAC-40 in France was 0.3 percent higher at 3,592.
In the U.S., the Dow Jones industrial average was 0.4 percent higher at 13,002 while the broader S&P 500 index rose 0.1 percent to 1,409.