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US and European stocks rose on Monday, mirroring the upward trend in Asian markets, as investors considered Beijing’s stimulus measures and awaited jobs data from the US.
The S&P 500 on Wall Street gained 0.5% after the opening bell, while the Nasdaq Composite index increased by 0.7%.
In Europe, the Stoxx 600 index rose by 0.9% following two consecutive down days. The technology sector led the gains, with the Stoxx 600 Technology index up 1.7%. Markets in the UK were closed for a public holiday.
This comes after Beijing reduced the levy on share trading for the first time since the 2008 financial crisis. China’s Ministry of Finance implemented additional measures to support the struggling market, including halving the stamp duty on stock trading to boost investor confidence.
This announcement is part of a series of stimulus attempts by China’s top officials to revive the second-largest economy, which has been grappling with the impact of the pandemic for the past three years.
The CSI 300 index, consisting of Shanghai- and Shenzhen-listed stocks, closed 1.2% higher, having surged as much as 5.5% earlier in the session. Hong Kong’s Hang Seng index also ended 1% higher.
European luxury goods stocks, which are closely tied to China’s consumer spending expectations, experienced gains, with Hermès and LVMH both rising approximately 1.5%.
Investors are also keeping an eye on US labor market data scheduled to release at the end of the week, which will provide insights into the future direction of interest rates.
Economists polled by Reuters predict that non-farm payrolls grew by 170,000 in August, compared to 187,000 in July.
US Federal Reserve Chair Jay Powell stated at the Jackson Hole economic conference last Friday that inflation “remains too high,” suggesting the possibility of additional interest rate hikes if price pressures persist.
In July, the US central bank raised the benchmark federal funds rate to a 22-year high, leaving room for further tightening if deemed necessary by rate-setters.
The dollar remained relatively stable against a basket of six other currencies.
The yield on the 10-year Treasury note decreased by 0.03 percentage points on Monday to 4.2%, while the two-year yield, sensitive to policy changes, increased by 0.01 percentage points to 5.07%. Bond yields rise when prices fall.
Trading volumes tend to be lighter in late August, compounded by the UK holiday on Monday.
In other Asian markets, Japan’s Topix index rose by 1.5%, and Australia’s S&P/ASX 200 gained 0.6%.
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