Stock Markets Rise as China Unveils Consumer Stimulus Plan
European and Asian stock markets began positively as investors responded to China’s consumer spending plans amid U.S. tariff concerns. Key stock indexes rose, with focus on upcoming monetary policy decisions from major central banks. While optimism prevails, analysts warn about the economic challenges posed by ongoing trade tensions and inflation concerns.
European and Asian stock markets opened the week positively on Monday, buoyed by China’s announcement to stimulate consumption amidst concerns over U.S. tariffs. Market gains followed a rally on Wall Street, incited by optimism surrounding a potential spending bill to avoid a government shutdown. Susannah Streeter of Hargreaves Lansdown noted, “Hopes that a new consumer life raft in China will buoy up the country’s prospects of recovery have helped lift sentiment slightly, but caution remains.”
Beijing’s officials are poised to detail a plan aimed at rejuvenating consumer spending, which has languished since the end of the Covid-19 pandemic and affected economic growth significantly. This plan aims to enhance income through property reforms, stabilize the stock market, and motivate lenders to offer consumption loans with favorable terms.
Moreover, the initiatives include increasing pension benefits, establishing a childcare subsidy system, and ensuring legal protections for workers’ rights to rest and holidays. The economic backdrop highlights concerns, specifically after consumer price deflation was reported for February and ongoing declines in producer prices.
Economists at Moody’s Analytics warned that the trade tensions with U.S. President Trump could exacerbate the situation: “With China firmly in U.S. President Donald Trump’s sights, deflation concerns in China will worsen,” emphasizing the negative impact tariffs may have on consumer spending.
Stock indexes in London, Paris, and Frankfurt rose on Monday, paralleling gains in Asia, while Hong Kong’s market capitalized on earlier successes driven by interest in Chinese tech companies. Traders are also anticipating policy decisions from the Federal Reserve, Bank of Japan, and Bank of England, all likely to maintain current interest rates with the Fed set to release new economic projections.
Gold prices hovered around $3,000 per ounce, reaching a threshold influenced by safe-haven buying amid tariff uncertainties. Key stock index performances around 1100 GMT included: London FTSE 100 (+0.2%), Paris CAC 40 (+0.4%), and Frankfurt DAX (+0.4%). Meanwhile, Brent crude oil prices increased by 1.2% to $71.41 per barrel, underscoring market volatility in response to global economic factors.
The announcement of new consumer initiatives in China has positively impacted global stock markets, particularly in Europe and Asia, despite ongoing concerns regarding U.S. tariffs and consumer deflation. The moves to enhance consumer spending through reforms and strategic economic support are pivotal for restoring market confidence. However, economists urge caution, highlighting the potential negative effects of trade tensions, particularly with the United States, on the broader economic landscape. Overall, markets remain vigilant as they await further announcements from key financial authorities.
Original Source: www.news-graphic.com
