Europe stocks climb after China rate cut

LONDON: European equities mostly rose Tuesday, following gains in Hong Kong and Shanghai, after China’s central bank sprang a record cut to a benchmark lending rate in a bid to boost the nation’s struggling economy. London won ground with Barclays jumping to the top of the risers board after the UK bank revealed plans to slash costs and return £10 billion ($12.6 billion) to shareholders.

The Paris stock market advanced, aided by solid results from industrial gas giant Air Liquide, but Frankfurt dipped. Chinese shares were buoyant

after the Lunar New Year, leading gains in most Asian markets thanks to a holiday boost, although Tokyo stumbled on profit-taking.

Oil prices headed lower as demand fears eclipsed concern over potential disruption to supplies from the crude-rich Middle East, while the dollar traded mixed.

“China provided a fresh boost to risk appetite... after the People’s Bank of China (PBoC) announced cuts in another step to the nation’s economic stimulus policy,” said ActivTrades analyst Pierre Veyret. The PBoC announced it was lowering the five-year loan prime rate (LPR), used to price mortgages, from 4.2 to 3.95 percent.

Beijing’s measures are intended to rally dwindling growth and counter rate hikes in other major economies, as the world’s second-largest economy battles a prolonged property-sector crisis and a global slowdown. “This news... gave investors reasons to buy the dip while waiting for other crucial macro developments,” added Veyret. The

Chinese central bank’s moves, aimed at pushing commercial banks to grant more credit at better rates, was the largest reduction since the key LPR was revamped in 2019, Bloomberg reported.

With US markets closed Monday for a holiday, investors are eyeing major upcoming earnings reports, including from Silicon Valley chip titan Nvidia on Wednesday. They are also awaiting publication of policy meeting minutes from the Federal Reserve and European Central Bank, on Wednesday and Thursday respectively. That could offer insights about hoped-for interest rate cuts in the United States and the eurozone. “Markets have adjusted to the idea that rate cuts would come later and probably be less important than what was originally priced,” Vincent Juvyns, global market strategist for JPMorgan Asset Management, told Bloomberg Television.

Data released Friday showed a greater-than-expected rise in US wholesale prices, crushing hopes of an early interest-rate cut by the Fed. — AFP