Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

European Stock Futures Surge Higher; Chinese Rate Cut Boosts Sentiment

Stock Markets May 20, 2022 07:30
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters

By Peter Nurse - European stock markets are expected to open sharply higher Friday, following the positive lead from Asia after China cut a key lending benchmark, seeking to support its ailing economy.

At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 1% higher, CAC 40 futures in France climbed 0.9% and the FTSE 100 futures contract in the U.K. rose 1.1%.

European equities are set to take their lead from gains in Asia overnight, with Hong Kong’s Hang Seng index up 2.2% and Japan’s Nikkei 1.3% higher, as a result of China cutting its five-year loan prime rate by 15 basis points earlier Friday, the largest cut on record.

That rate is used as a reference rate for mortgages, and the cut, the second reduction this year, 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. 

Back in Europe, the economic news was more mixed. 

U.K. retail sales rose 1.4% on the month in April, much stronger than the expected fall of 0.2%, while dropping 4.9% year-on-year, ahead of the predicted  7.2% fall. 

However, German factory gate prices rose again in April, climbing 2.8% on the month, a hefty jump of 33.5% on the year, suggesting inflationary pressures will take some time to disperse. 

In the corporate sector, Zurich Insurance (SIX:ZURN) announced Friday it has agreed to sell its Russian business to members of the local team, with the Swiss insurer becoming the latest company to announce its exit from the Russian market. 

Luxury goods group Richemont (SIX:CFR) will also be in focus after strong American demand for its jewellery and watches boosted net profit and sales in the 12 months to March.

Oil prices edged lower Friday as concerns about weaker economic growth eclipsed expectations of a demand rebound in China as the world's top crude importer eased some COVID-19 lockdowns.

The crude market is on course to end the week on a negative note as investors, worried about rising inflation and more aggressive action from central banks, have been reducing exposure to riskier assets.

By 2:05 AM ET, U.S. crude futures traded 0.7% lower at $109.14 a barrel, while the Brent contract fell 0.5% to $111.52. 

Additionally, gold futures rose 0.2% to $1,845.50/oz, while EUR/USD traded largely flat at 1.0585.

European Stock Futures Surge Higher; Chinese Rate Cut Boosts Sentiment

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
Sign up with Email