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Home/European stocks rise on UK retail sales data, China rate cut
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European stocks rise on UK retail sales data, China rate cut

The DAX in Germany traded 1.3% higher, the CAC 40 in France rose 0.9%, and the UK’s FTSE 100 climbed 1.5%

European stock markets traded higher Friday, ending the week on a positive note with investors buoyed by strong UK retail sales data as well as China cutting a key lending benchmark.

By 0805 GMT, the DAX in Germany traded 1.3% higher, the CAC 40 in France rose 0.9%, and the UK’s FTSE 100 climbed 1.5%.

European equities received a boost after China cut its five-year loan prime rate by 15 basis points earlier Friday, the largest cut on record, and comes as Beijing seeks to revive the troubled housing sector to prop up the second-largest economy in the world. 

China's economy, a key global growth driver, is widely expected to shrink this quarter from a year earlier, compared with first quarter's 4.8% growth, with the property sector seen as a key drag on growth on the back of COVID-related mobility restrictions.

Adding to the positive tone was the news that UK retail sales rose 1.4% on the month in April, in contrast to expectations for a further 0.2% decline, as a result of higher spending on alcohol and tobacco in supermarkets as well as stronger clothing sales.

That said, market research firm GfK said UK confidence is now at an all-time low amid growing concern over the cost of living crisis.

In the corporate sector, Richemont stock slumped over 10% after the Swiss luxury goods group said discussions about its ‘Luxury New Retail’ partnership were still ongoing even as it reported strong American demand for its jewellery and watches.

Zurich Insurance stock fell 0.4% after the Swiss insurer announced Friday it has agreed to sell its Russian business to members of the local team, becoming the latest company to announce its exit from the Russian market.