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Stocks rise on China's economic recovery and reforms

Tom Belger
·Finance and policy reporter
·2-min read

Watch: Biggest gains in three months for Chinese stocks

European markets edged higher on Monday, after Chinese stocks rallied on fresh signs of strong economic recovery and market reforms.

The pan-European STOXX 600 (^STOXX) rose 0.2% on the open to its highest level in almost a month, despite its troubles getting a grip on the coronavirus.

France’s CAC 40 (^FCHI) also rose 0.2% and Germany’s DAX (^GDAXI) was trading 0.3% higher. Britain’s FTSE 100 (^FTSE) lost 0.2%, with concerns over tighter economic restrictions looming in parts of the country.

It followed gains in much of Asian in trading overnight.

A man looks at the Pudong financial district of Shanghai November 20, 2013. With a shift in tone and language, China's central bank governor has dangled the prospect of speeding up currency reform and giving markets more room to set the yuan's exchange rate as he underlines broader plans for sweeping economic change. The central bank under Zhou Xiaochuan has consistently flagged its intention to liberalise financial markets and allow the yuan to trade more freely, even before the Communist Party's top brass unveiled late last week the boldest set of economic and social reforms in nearly three decades.   REUTERS/Carlos Barria (CHINA - Tags: BUSINESS CITYSCAPE TPX IMAGES OF THE DAY)
Pudong financial district of Shanghai, China. Photo: Carlos Barria/Reuters

“Equity markets in the region have... started the week on the front foot with the Shanghai Composite (^SSEC) leading the gains partly on the back of news that Chinese President Xi could unveil plans to further open parts of the economy to foreign investment,” noted Deutsche Bank analysts in a note.

READ MORE: UK services sector recovery slows as restrictions reintroduced

Stocks were trading 2.6% higher in Shanghai. China’s government is exploring ways for institutional investors to attract more mid and long-term funds, according to Reuters.

The most recent data also shows sustained growth in China’s services sector, a rebound in tourism and limited COVID-19 cases while other regions struggle with a resurgent virus.

The Hang Seng (^HSI) in Hong Kong rose 2.2%, and the Kospi (^KS11) in South Korea rose 0.5%, but Japan’s Nikkei (^N225) shed 0.3%.

US markets looked set to rise on the open. S&P 500 (ES=F) futures rose 0.2%, Dow Jones futures (YM=F) were flat, and Nasdaq (NQ=F) were up 0.4% as European markets opened.

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