European stocks and US equity futures advanced after China unveiled a series of stimulus measures aimed at boosting economic growth, encouraging investors to seek riskier assets. The Stoxx Europe 600 Index rose by 0.7%, driven by sectors with exposure to China, including miners, luxury goods makers, and automakers. Brent crude surged above $75 per barrel, while iron ore prices increased, boosting the shares of companies like Rio Tinto Plc and BHP Group Ltd.
China’s stimulus package, which included reduced reserve requirements for banks and 800 billion yuan ($114 billion) in liquidity support, fueled positive market sentiment. This offset the impact of weak European economic data from earlier in the week. However, Goldman Sachs strategists cautioned that the European slowdown remains a key risk for stocks, as the effects of China’s stimulus may take time to filter through.
German carmakers Mercedes-Benz, BMW, and Volkswagen saw gains of over 2%, though structural challenges in China’s electric vehicle market may limit long-term benefits for these firms.
In China, the stimulus boosted a key stock index to its best performance since July 2020, helping the MSCI emerging-market index rise by over 1%.