Title: European Stocks Higher After Chinese Rate Cut; Unilever Tumbles on GSK Unit Bid
Jan 17, 2022 06:01AM ET
European stock markets broadly advanced on Monday, supported by the Chinese central bank's measures to shore up the weakening economy.
China's central bank cut the interest rate on one-year loans for the first time in two years, signaling its intention to put a safety net under the economy, whose zero interest rate policy and property and financial sectors are under varying degrees of pressure.
Although China's fourth-quarter growth figures were better than expected, they showed a sharp slowdown in retail sales growth in December as the northern hemisphere winter ushered in a new round of local mobility restrictions. Many of Europe's largest consumer and industrial stocks are highly dependent on the Chinese market.
At 5:45 AM ET (1045 GMT), the Euro Stoxx 600 index was 0.5% higher at 483.58, while Germany's DAX index was up 0.3%, Britain's FTSE 100 was up 0.6%, and France's CAC 40 was up 0.5%.
Credit Suisse shares slumped another 1.6% after its chairman, Antonio Horta Osario, appointed less than a year ago to halt the bank's alarming decline in value, was sacked after repeated breaches of COVID-19 protocols. The bank is routinely traded as a takeover target after a spectacular fall from grace marked by embarrassingly public management feuds and some catastrophic miscalculations, most notably involving collapsed private office Archegos and disgraced Australian financier Lex Greensill.
With no trading in the US and a news blackout imposed by the Federal Reserve, the foreign exchange market failed to gain momentum. The euro slipped to $1.1420 as expectations grew that the European Central Bank would be forced to bring forward its monetary tightening timetable.