EUROPE MARKETS: Europe Markets Climb On Signs Of China Stimulus
June 11 2019 - 06:26AM
Dow Jones News
By Dave Morris
European markets rode a wave of optimism as China appeared to
authorize measures to stimulate local economies.
How did markets perform?
The Stoxx 600 climbed 0.9% to 381.5. On Monday, it edged up
0.2%.
In Germany, the DAX led the regional indexes as it reopened
after being closed Monday. It rose 1.3% to 12,206.5.
The U.K.'s FTSE 100 increased 0.5% to 7,412, adding to Monday's
gain of 0.6%.
The pound bounced back by 0.2% to $1.2706, after sinking 0.5%
Monday.
France's CAC 40 was 0.8% higher at 5,423.1. It edged up 0.3%
Monday.
Italy's FTSE MIB was at 20,658.6, adding 0.9% to Monday's
increase when it moved up 0.6%.
What's moving the markets?
U.S. President Donald Trump's rhetoric on China grabbed the
headlines, but markets appear to be rallying on news that China has
reopened the credit spigots. Xinhua reports
(http://www.xinhuanet.com/english/2019-06/10/c_138131810.htm) that
local governments are being urged to issue "special" bonds to pay
for major projects such as the development of the
Beijing-Tianjin-Hebei region. Local government debt has frequently
been cited as a concern by observers worried about the nation's
debt burden, an obstacle in the government's plan to shift the
economy toward consumption-led growth.
President Trump meanwhile told CNBC
(https://www.cnbc.com/2019/06/10/trump-to-cnbc-china-will-make-a-deal-because-theyre-going-to-have-to.html)
that China will make a deal "because they have to", and threatened
to increase tariffs if China's President Xi Jinping doesn't attend
the G-20 summit. Trump also complained about the weakening Yuan,
which fell to year-to-date lows against the U.S. dollar Monday.
After a significant period of concern around whether Italy would
challenge the European Union over its debt rules, Prime Minister
Giuseppe Conte issued a statement saying the leaders of the
country's fractious governing coalition agreed to work together to
avoid EU disciplinary action. Euroskeptic Deputy Prime Minister
Matteo Salvini said their goals included safeguarding economic
growth and avoiding tax increases.
In the U.K., average weekly earnings for April showed an
increase of 3.4%, outpacing economists' forecasts of 3.2%, while
unemployment remained at 3.8% as expected. "The labor market
continues to be strong, with employment still at a joint record
rate," said Matt Hughes, deputy head of Labour Market at the Office
of National Statistics. "However, while the number of vacancies
remains high, it has fallen back slightly from the historic highs
seen at the turn of the year."
Which stocks are active?
Ted Baker PLC (TED.LN) shares plummeted 25.7% as the fashion
brand and retailer issued a profit warning, reducing projections of
pretax profits in the fiscal year to January 2020 to between GBP50
and GBP60 million, versus prior guidance of GBP70 million. The
company cited "extremely difficult trading conditions".
Shares in safety, health and environmental technology company
Halma PLC (HLMA.LN) rose 2% after earnings showed record pretax
profit
(http://www.marketwatch.com/story/halma-profit-up-20-on-record-revenue-2019-06-11)
in fiscal 2019 of GBP206.7 million, up from GBP213.7 million in the
prior year.
Russ Mould, investment director at AJ Bell, said the company
ought to be a household name: "Halma's dividend has doubled in the
past decade alone and the manner in which this reflects the
company's strong long-term position and transmits management's
confidence in the future brings share price rewards."
(END) Dow Jones Newswires
June 11, 2019 06:11 ET (10:11 GMT)
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