On Monday, European stocks rose after four consecutive days of decline, with energy stocks leading the increase amid a global rise in crude oil prices, and Danish pharmaceutical company Novo Nordisk leading the gains in healthcare stocks. The pan-European STOXX 600 index rose 0.6%. Last Friday, the index closed at its lowest level in six consecutive weeks.
Energy stocks increased by 1.2% as global supply tightening drove up crude oil prices, with Saudi Arabia and Russia reducing exports, alleviating concerns about demand growth in a high interest rate environment.
The European healthcare index rose by 1.0% after Morgan Stanley raised its target price for Novo Nordisk, which climbed by 1.9%.
Among UK mid-caps, housing developer Crest Nicholson's shares fell by 2.5% after it lowered its full-year profit forecast. According to industry surveys, the selling prices of UK houses fell sharply this month. European real estate stocks fell for the seventh consecutive trading day, losing 1.0%.
China cut its one-year benchmark lending rate to stimulate credit demand, but surprisingly left the five-year rate unchanged. Louise Kernohan, investment manager at Newton, expressed strong support for policy actions but questioned whether they were adequate. Stocks of luxury giants heavily influenced by China, such as LVMH, Kering, and Hermès, rose by about 1% each.
With expectations of long-term high interest rates, investors are weighing the prospects of further weakness in German economic data and a preference for safe-haven assets amid concerns about the Chinese economy, leading to a divergence in eurozone government bond yields.
Despite official data showing that German producer prices in July fell more than expected, the German DAX index rose by 0.6%. Wall Street futures rose after major US stock indices reported weekly declines.
Investors will closely monitor the Jackson Hole Economic Symposium held this week, during which European Central Bank President Christine Lagarde and Federal Reserve Chairman Jerome Powell are expected to provide clues about the interest rate outlook.
