Stocks Rise as Risk Appetite Is Sparked by China Stimulus – Europe Market Wrap

European equities and US share futures rose as China announced a raft of stimulus measures aimed at boosting economic development, increasing investor demand for riskier assets.

The Stoxx Europe 600 Index increased 0.7%, led by sectors vulnerable to China, such as miners, luxury goods manufacturers, and automakers. Brent crude surpassed $75 per barrel, while iron ore prices rose. US equities futures pointed to gains at the Wall Street open, but Treasuries fell.

China’s comprehensive package of monetary stimulus on Tuesday boosted risk sentiment, including lower reserve requirements for banks and at least 800 billion Yuan ($114 billion) in liquidity support for equities.

While the news from Beijing helped to alleviate the gloom of Monday’s negative European economic data, strategists warned that the region’s recession poses a significant risk to stocks.

Oil prices rose on word of the backing, as a significant Israeli raid on Hezbollah sites in Lebanon heightened Middle Eastern tensions. Gold set a new high of $2,640.11 per ounce.