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European and Asian stock markets rose on Friday, boosted by positive economic data from China and the successful listing of British chip designer Arm.
The Stoxx 600 in Europe rose 0.9%, extending gains from the previous session, when the European Central Bank raised euro zone interest rates to 4%, possibly for the last time in this cycle.
Paris’ CAC 40 rose 1.4%, Frankfurt’s Dax rose 1% and London’s FTSE 100 rose 0.9%.
Investor sentiment was also boosted by official Chinese data showing that China’s retail sales and industrial production rose more than analysts expected in August.
European consumer cyclical stocks and basic materials stocks led the gains, rising 2% and 1.4% respectively, as these sectors are particularly sensitive to expectations of Chinese consumer spending. The Stoxx Europe luxury goods index rose 2.7%, with Paris-listed retail giant LVMH rising 3.8%.
In Asia, Hong Kong’s Hang Seng Index rose 0.8% and Tokyo’s Topix gained 1%. After the data was released, the CSI 300 Index rose briefly, then fell back, closing down 0.7%.
China’s economy has struggled to rebound after damaging zero-COVID measures were rolled back late last year, and investors are on high alert for signs that recent stimulus measures may be having an impact.
“Optimism is growing among a group of investors who believe Beijing’s recent moves to stimulate the economy and stabilize financial markets are showing signs of success,” said Stephen Innes, managing partner at SPI Asset Management.
However, Innis added that “a single month of positive data is not enough to confirm a sustained path to recovery”.
The positive data came after the People’s Bank of China cut bank deposit reserve requirements by 0.25 percentage points to 7.4%, freeing up about 500 billion yuan ($70 billion) of liquidity for lenders.
Goldman Sachs analysts wrote in a note that the rate cut would help offset a surge in local government bond issuance in recent weeks that has drained liquidity from the banking system and pushed up interbank lending. Borrowing costs.
“Injecting liquidity through lower reserve requirements will help curb interbank rates amid strong liquidity needs and ensure lower funding costs for banks,” analysts wrote.
The debut of chip design company Arm also boosted market sentiment, with the company closing up nearly 25% on its first day of trading in New York. The company’s shares rose 6.2% in premarket trading Friday.
The SoftBank-backed company’s nearly $5 billion listing marks Wall Street’s largest initial public offering in nearly two years, with a first-day rise pushing its market value to more than $65 billion.
The S&P 500 and the tech-heavy Nasdaq Composite ended nearly 1% higher on Thursday. When Wall Street trading began later in the day, futures pointed to a 0.1% gain for the S&P.
