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European stocks saw an upward trend on Monday as the tech sector saw gains, diverting attention from China’s struggling real estate market and the slowdown in post-pandemic recovery.
The region-wide Stoxx 600 in Europe rose by 0.1%, recovering from early losses. France’s Cac 40 increased by 0.2%, while Germany’s Dax climbed 0.5%.
Amsterdam-based Philips experienced the highest gains in Europe, with a 4.7% increase, following the Agnelli family’s investment of a 15% stake in the Dutch company to support its shift from electronics to health technology.
In Asia, equity markets experienced a decline after property developer Country Garden suspended trading in at least 10 of its mainland bonds over the weekend.
The company, once the top developer in China, failed to make international bond payments last week, fueling concerns among investors that the liquidity crisis in the country’s real estate sector, ongoing for two years, may intensify further.
Hong Kong’s Hang Seng index dropped by 1.6%, with the Hang Seng Mainland Properties index, which tracks China’s real estate developers, down by 3.7%. In mainland China, the benchmark CSI 300 saw a decline of 0.7%.
“The persisting challenges in the Chinese property sector are amplifying the disappointing Chinese economic data from last week, which included deflation, trade, and new loans,” commented Chris Turner, ING’s head of foreign exchange strategy.
Chinese equities experienced their most significant drop since March last week, as a series of economic data releases indicated that the country is heading towards deflation. Exports declined, and banks issued the lowest amount of new loans since the 2008 financial crisis. More data, including China’s retail sales and industrial production figures, is expected this week.
In other parts of Asia, Japan’s Topix index fell by 1%, and South Korea’s Kospi slipped by 0.8%.
Weaker economic data put pressure on oil prices as concerns grew over global fuel demand. Brent crude, the international benchmark, fell by 0.8% to $86.16 per barrel, while West Texas Intermediate, the US marker, declined by the same margin to $82.51.
US futures contracts tracking the benchmark S&P 500 rose by 0.2%, while those tracking the tech-focused Nasdaq 100 added 0.4% ahead of the opening in New York.
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