EUROPE MARKETS: European Markets Climb As China Sets New Growth Targets
March 05 2019 - 6:35AM
Dow Jones News
By Emily Horton
Europe's markets rose on Tuesday, after China's government set
new growth targets for its economy. Although these dipped slightly,
they still remain at an ambitious rate.
How are markets performing?
The Stoxx Europe 600 added 0.2% to 375.66 after finishing Monday
up 0.2%.
The FTSE 100 led the region's top gainers, climbing 0.4% to
7,159.47, with Italy's FTSE MIB the second top climber, adding 0.2%
to 20,767.80.
Meanwhile, the German DAX (DAX) rose by 0.1% to 11,609.42,
France's CAC 40 jumped by 0.1% to 5,291.48 and Spain's IBEX 35 rose
0.2% to 9274.60.
The pound remained mostly flat at $1.3184, while the euro
slipped to $1.1329 from $1.1340 late in New York on Monday
night.
What's driving the markets?
China lowered its growth target to between a range of 6% to 6.5%
(http://www.marketwatch.com/story/china-sets-economic-growth-target-vows-foreign-companies-will-get-equal-treatment-2019-03-04)
on Monday, placing it below last year's 6.6% growth target. The
lower bound of the target would mark a three decade low for China's
economic growth, but it would still be among the world's strongest
economies.
Alongside this announcement Premier Li Keqiang said that China
was aim to achieve nearly 2 trillion yuan ($298 billion) of cuts in
taxes and other economic measures.
Meanwhile, in Europe, February's PMI data showed Italy's service
sector unexpectedly returned to growth last month, but a GDP
release confirmed the country went into technical recession at the
end of last year. Both will be in the mix ahead of Thursday's
European Central Bank meeting
(http://www.marketwatch.com/story/opinion-ecb-has-a-plan-for-markets-and-is-looking-for-reasons-to-act-2019-03-05).
In the U.K., services PMI came in above forecast, showing a modest
increase in activity.
In Brexit news, U.K. banks will be able to borrow in euros from
the Bank of England from next week
(http://www.marketwatch.com/story/bank-of-england-activates-euro-swap-line-2019-03-05-5485614),
the latest move to support the U.K.'s financial system in the event
of an abrupt and messy break from the European Union.
The BoE warned, however, that investors should still prepare for
severe disruption in financial markets if the U.K. tumbles out of
the EU March 29 with no deal.
What stocks are active?
Vodafone Group PLC (VOD.LN) added 3% after the group announced
plans to sell $4.5 billion of convertible bonds to help fund its
acquisition of some of Liberty Global PLC's European business. The
telecommunications giant is also considering buybacks to reduce
share dilution.
Intertek Group PLC (ITRK.LN) lost 3%, with UBS analysts raising
concerns about a slowdown, despite the company reporting a pretax
profit rise of 2.8%.
Meanwhile, Ashtead Group PLC (AHT.LN), which makes 90% of its
profit from its U.S. operation Sunbelt, dropped by nearly 2%
despite well received results. The company's management said that
its strong performance appears to have translated into "some short
term profit-taking on recent advances", and Russ Mould, an
investment director at stockbroker AJ Bell, said it "probably
reflects concern that the U.S. economy is slowing down".
(END) Dow Jones Newswires
March 05, 2019 07:20 ET (12:20 GMT)
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