European stocks rise on Chinese stimulus; growth concerns remain By Investing.com

Investing.com – European stocks rose on Tuesday, boosted by more stimulus from key export market China, but concerns over the region’s growth outlook capped gains.

At 03:05 ET (07:05 GMT), Germany was trading 0.9% higher, France was up 1.4% and Britain was up 0.6%.

Chinese stimulus lifts the mood

European shares got a mostly positive hand from Asia after Chinese officials unveiled a series of measures planned to boost economic growth, with the People’s Bank set to cut reserve requirements for banks by 50 basis points to unlock more liquidity .

Tuesday’s moves came after the PBOC cut the short-term repo rate on Monday to further boost liquidity.

The moves are aimed squarely at supporting economic growth as China’s economy struggles with lingering disinflation and a broad downturn in the housing market.

China is a major export market for a number of Europe’s top companies, which have struggled amid falling demand as Chinese consumers cut spending.

Eurozone growth concerns remain

However, concerns about the growth outlook for the euro area remain.

Data released on Monday showed that the regional region contracted sharply and unexpectedly this month as the decline in the bloc’s manufacturing sector accelerated.

The decline was widespread, with Germany, Europe’s largest economy, seeing its decline deepen, while France – the second largest – returned to contraction.

It follows later in the session and is also expected to show a deterioration in sentiment.

It cut key interest rates by 25 basis points earlier this month, following a similar move in June, and the slowdown could raise the stakes for further policy easing in October.

Commerbank in the game

In the corporate sector, the focus will remain on Commerzbank (ETR:) after news that UniCredit SpA (ETR:) used derivatives to potentially double its stake in the German lender before getting regulatory approval for an effective holding of more than 9.9%.

German Chancellor Olaf Scholz criticized the move as “an unfriendly attack” and the German state still owns 12% of Commerzbank.

UniCredit is seeking ECB approval to increase its stake in Commerzbank to just under 30%, triggering a mandatory takeover under German corporate laws.

Chinese stimulus boosts crude oil

Crude oil prices rose sharply on Tuesday, boosted by fresh monetary stimulus from top importer China as well as escalating tensions in the Middle East.

By 3:05 a.m. ET, the contract was up 1.1% at $74.03 a barrel, while futures (WTI) traded 1.3% higher at $71.25 a barrel .

China’s central bank announced ample monetary stimulus on Tuesday, boosting hopes for increased demand for crude oil from the world’s biggest importer as economic activity picks up.

Meanwhile, Israel’s military said it had launched airstrikes against Hezbollah sites in Lebanon on Monday, raising concerns about a supply disruption from the oil-rich region, tightening global markets.