A chart of the German DAX stock price index is photographed at the Frankfurt Stock Exchange, Germany, on September 1, 2023. REUTERS PHOTO/STAFF/FILE Obtaining licensing rights
September 4 (Reuters) – European stocks hit a three-week high on Monday, with investors optimistic that a series of stimulus measures from China will support its slowing economy, while Novo Nordisk shares hit a new record high.
The European STOXX 600 index rose 0.8 percent after three days of losses.
Mining company shares rose 1.8%, leading gains among European sectors, with iron ore futures rising due to optimism about the policy of supporting China, the largest steel producer, for its faltering real estate sector.
China has intensified measures to boost the country’s faltering economy, with major banks paving the way for further cuts in lending rates, and sources say Beijing is planning further measures, including easing restrictions on home purchases.
“Investors have an increasingly positive view of last week’s economic reforms around the mortgage market,” Peter Garnery, head of equity strategy at Saxo Bank, said in a note.
“The focus this week is on whether Chinese stocks will continue to rise and whether energy markets will remain strong.”
Oil stocks (.SXEP) rose 0.3% as crude oil prices stabilized amid expectations that major producers will keep supplies tight. An official announcement is expected this week.
European stocks erased part of their losses in August, as recent economic data fueled expectations that major central banks were close to finishing raising interest rates.
Data on Friday showed a jump in the US unemployment rate that boosted the Federal Reserve’s bets on keeping interest rates unchanged at its policy meeting later this month.
US markets are closed on Monday for Labor Day.
Investors also scaled back bets that the European Central Bank will raise interest rates by another 25 basis points in September, with inflation in the euro zone stabilizing in August.
Novo Nordisk (NOVOb.CO) rose 1.7% to a record high after the Danish pharmaceutical company launched the weight-loss injection Wegovy in Britain. Novo, with a market capitalization of $424.7 billion, unseated LVMH (LVMH.PA) from its position as Europe’s top listed company on Friday.
Vonovia (VNAn.DE) rose 0.4% after Morgan Stanley upgraded the German real estate company to “equal weight” from “underweight,” saying the end of the rate hike cycle could support the stock.
(Reporting by Sruthi Shankar in Bengaluru; Reporting by Mohammed for the Arabic Bulletin) Editing by Elaine Soering and Janan Venkatraman
Our standards: Thomson Reuters Trust Principles.