Global stocks mostly edged up on Monday as investors remained optimistic that interest rates will not go higher and China made moves to boost lackluster growth.
Wall Street stocks finished a choppy session modestly higher, as investors traded cautiously ahead of key economic and earnings releases later in the week.
European stock markets were boosted by data showing the economy grew in the second quarter and inflation slowed in July, raising hopes the European Central Bank will be able to hold off from hiking interest rates.
Asian equities closed with gains, tracing a pre-weekend bump on Wall Street and bolstered by new pledges from China of measures to stimulate its stuttering economy.
In the eurozone, official figures on Monday showed the economy grew 0.3 percent in the second quarter, while inflation eased to 5.3 percent in July from 5.5 percent the previous month.
That could support expectations for a pause in ECB rate hikes, after its chief Christine Lagarde said Sunday “we are reaching our goal” of inflation at around two percent.
“We do expect a much lower reading in inflation by the end of the year,” said Bert Colijn, a senior economist at ING.
Inflation remains much higher in the UK, at nearly eight percent, putting the Bank of England on course to raise interest rates once more on Thursday.
In China, the world’s second-largest economy, the government announced fresh measures to boost consumption days after unveiling some initiatives for light industry.
The move comes as spending by China’s vast number of consumers remains subdued even after the lifting of strict Covid containment measures late last year.
A fresh round of figures showed the country’s manufacturing activity continued to shrink in July, albeit at a slightly slower pace than last month.
Hopes for a government drive to kickstart the economy have provided much-needed support to markets over the past week, even as some observers warn the large-scale measures seen in the past were unlikely.
Oil prices kept rising.
“Fears that Saudi Arabia will go further and extend their production cuts into September is seeing demand return at the same time as the US economy looks to be faring better than expected,” said analyst Michael Hewson at CMC Markets.
In currency markets, the yen continued its retreat against the dollar as the Bank of Japan announced a move to buy government bonds. This was seen as a message to the market that the central bank was committed to keeping the long-term interest rate in check.
The bank slightly increased the flexibility of its super-easy monetary policy last week, but it was seen as a small enough change not to disrupt the market.
– Key figures around 2030 GMT –
New York – Dow: UP 0.3 percent at 35,559.53 (close)
New York – S&P 500: UP 0.2 percent at 4,588.96 (close)
New York – Nasdaq: UP 0.2 percent at 14,346.02 (close)
London – FTSE 100: UP 0.1 percent at 7,699.41 (close)
Frankfurt – DAX: DOWN 0.1 percent at 16,446.83 (close)
Paris – CAC 40: UP 0.3 percent at 7,497.78 (close)
EURO STOXX 50: UP 0.1 percent at 4,471.31 (close)
Tokyo – Nikkei 225: UP 1.3 percent at 33,172.22 (close)
Hong Kong – Hang Seng Index: UP 0.8 percent at 20,078.94 (close)
Shanghai – Composite: UP 0.5 percent at 3,291.04 (close)
Dollar/yen: UP at 142.28 yen from 141.16 yen on Friday
Euro/dollar: DOWN at $1.0997 from $1.1016
Pound/dollar: DOWN at $1.2834 from $1.2851
Euro/pound: DOWN at 85.67 from 85.70 pence
West Texas Intermediate: UP 1.5 percent at $81.80 per barrel
Brent North Sea crude: UP 0.7 percent at $85.56 per barrel