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Europe: China measures, Italian banks lift shares to record close
[BENGALURU] European shares hit a record high close on Monday as a rally in Italian banks and fresh attempts by China to limit the economic impact of the coronavirus outbreak lifted investor spirits.
Despite a US holiday dulling market activity, the pan-European Stoxx 600 index rose 0.3 per cent, with trade-sensitive German stocks hitting all-time highs as Beijing stepped up stimulus measures.
Adding to the upbeat mood, Italy's fifth-biggest bank UBI Banca jumped 5.5 per cent after saying it aimed to nearly double net profit in the next three years, sending a broader index of Italian banks up 1.8 per cent.
Even as China reported more coronavirus cases over the weekend, prompting economists to cut growth forecasts, investors took heart from the central bank's move to cut interest rates.
"The fact that China keeps signalling that they're ready to somewhat bubblewrap the economy by pumping in stimulus - that's what's keeping markets in the green today," said Connor Campbell, analyst at financial spread better Spreadex.
"This week is interesting because we've got manufacturing PMIs (on Friday), I think it will give an idea of some impact on supply chains from the coronavirus."
Meanwhile, euro zone finance ministers will also discuss a document that calls for a more growth-friendly fiscal policy as recession fears grip Germany and the coronavirus outbreak threatens global growth.
Automobile stocks, were the best performing European sector, led by French car parts group Faurecia after reporting a rise in annual profits and sales.
In merger news, France's Alstom rose 3.5 per cent after the maker of TGV bullet trains said it was in talks to buy the train business of Canada's Bombardier in a potential US$7 billion deal.
Meanwhile, Finland's Kone slid 4.6 per cent as it dropped out of the auction for the 16-billion-euro elevator unit of Thyssenkrupp after the German conglomerate shortlisted two private equity consortia for the sale.
German herbicide providers Bayer AG and BASF SE fell 1.9 per cent and 1 per cent, respectively, after a US peach grower was awarded US$265 million in a lawsuit against the two.