European stocks hit record high amid China-fueled rally By Investing.com

Investing.com — European stocks hit a new high in mid-morning trade on Friday, boosted by momentum in Asia led by China.

At 05:13 ET (09:13 GMT), the pan-European added 0.3% to 526.92. Earlier it touched an intraday high of 526.51.

Germany traded 0.6% higher, France rose 0.3% and Britain climbed 0.3%.

More Chinese stimulus ahead, reports say

China’s central bank cut interest rates and pumped more liquidity into the domestic banking system on Friday as Beijing continues efforts to prop up the country’s booming economy and hit a growth target of around 5 percent this year. year.

The measures, which would come after a separate stimulus package was announced earlier this week, are expected to be announced ahead of the week-long holiday that starts on October 1, Reuters reported. The news agency added that a meeting of China’s top Communist Party leaders highlighted concerns about the health of the world’s second-largest economy.

Citing sources, Reuters said the cities of Shanghai and Shenzhen plan to lift key home purchase restrictions in the coming weeks. Chinese officials are also eyeing a special issue of sovereign bonds worth about 2 trillion yuan ($284.43 billion), Reuters said.

If the reports are correct, the package could help boost China’s gross domestic product by about 0.4 percent over the next year, Capital Economics analysts said in a note to clients.

Hopes for more stimulus drove Chinese stocks to their best week since 2008.

The measures also supported luxury stocks in Europe, which derive much of their revenue from sales in China. Shares of high-end fashion groups such as LVMH, Kering (EPA: ), Hermes, Hugo Boss and Burberry advanced, while auto stocks also gained.

Moncler shares received a further boost after LVMH agreed to take a stake of up to 22% in the investment vehicle that controls the Italian luxury outerwear maker.

French and Spanish inflation fall; focus shifts to US data

Inflation in France and Spain fell more than expected in September, adding to expectations that the European Central Bank will launch another interest rate cut next month.

In France, annual consumer price growth fell to 1.2 percent from 1.8 percent in August, below economists’ forecasts of 1.6 percent. A corresponding figure in Spain also fell to 1.5% from 2.3%, slower than forecasts of 1.9%.

Investors will likely keep a close eye on fresh U.S. personal spending and inflation data, which could provide a glimpse into the state of the world’s largest economy as the Federal Reserve moves closer to more rate cuts expected later this year. The Fed cut borrowing costs by 50 basis points last week.

Personal spending, which accounts for more than two-thirds of economic activity, is expected to have risen 0.3 percent in August, slowing from 0.5 percent the previous month.

Meanwhile, economists expect the personal consumption expenditures (PCE) price index, which is used by Fed officials as a gauge of inflation, to rise 0.2 percent month-on-month in August, on pace with July. Year-on-year, the reading is seen decelerating to 2.3% from 2.5%.

(Reuters contributed reporting.)