European and Asian stock markets rose as China announced plans to stimulate consumer spending to combat economic stagnation. Investors showed optimism following Wall Street’s pre-weekend rally while remaining vigilant about US-China trade tensions. Analysts highlighted both positive market movements and caution regarding sustained recovery amidst ongoing tariff concerns.
European and Asian stock markets commenced the week positively, buoyed by China’s initiative to invigorate consumer spending amid ongoing tariff anxieties from the United States. This surge was preceded by an optimistic rally on Wall Street, where investors anticipated a bipartisan spending bill to prevent a government shutdown.
Susannah Streeter, head of money and markets at Hargreaves Lansdown commented, “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.” Attention is now directed toward Beijing, where plans for enhancing consumer spending after a prolonged period of economic weakness are anticipated.
China’s proposed measures aim to increase disposable income through property reforms, stabilize the stock market, and encourage banks to offer consumer loans under favorable conditions. Additional proposals include increased pension benefits, implementing a childcare subsidy system, and legally safeguarding workers’ rights to rest and holidays.
This move follows a report revealing that consumer prices entered deflation in February for the first time in a year, compounded by a continued decline in producer prices. Analysts express concerns regarding the difficulties faced by leaders amidst US President Donald Trump’s trade war, with Moody’s Analytics stating, “With China firmly in US President Donald Trump’s sights, deflation concerns in China will worsen.”
European markets, including London, Paris, and Frankfurt, exhibited gains, in line with the positive momentum in Asia. Hong Kong’s stock market continued its impressive start to the year, fueled by strong interest in Chinese technology companies, while both Shanghai and Tokyo registered substantial buying activity.
Market participants are anticipating policy announcements from the Federal Reserve, the Bank of Japan, and the Bank of England this week, with expectations that interest rates will be maintained. The Fed will also publish its economic projections and outlook concerning borrowing costs, amid attempts to manage the inflationary challenges posed by trade regulations.
On the commodities market, gold prices hovered around the $3,000 per ounce threshold on Monday, following their breakthrough of this mark previously owing to a flight to safety among investors in response to tariff-related uncertainties.
In conclusion, Asian and European stock markets experienced growth driven by China’s new consumer spending initiatives aimed at addressing economic stagnation. Investors remain cautious, closely monitoring developments in the US-China trade dynamics and forthcoming monetary policy decisions by key central banks. Overall, the economic landscape is influenced by rising consumer pressure in China and regulatory concerns amid trade policies.
Original Source: www.news-graphic.com
