European shares rise as investors look to tech stocks

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European stock markets followed Asia higher in morning trade on Monday as technology and China-related shares boosted investor sentiment.

The pan-European Stoxx 600 rose 0.5 per cent, following two successive down days. The Cac 40 in Paris was 0.6 per cent higher and the Dax in Germany added 0.4 per cent. Markets in London were closed for a public holiday.

Europe’s technology stocks led gains across the board, with the Stoxx Europe 600 Technology index up 1 per cent after an overnight rally on Wall Street.

Futures markets tracking the S&P 500 benchmark and those following the tech-heavy Nasdaq 100 indicated both indices would open 0.2 per cent higher on Wall Street.

Meanwhile, China-related sectors such as industrials and basic materials advanced 0.7 per cent and 0.3 per cent respectively, after Beijing cut a levy on share trading for the first time since the 2008 financial crisis.

China’s Ministry of Finance introduced additional measures to support the country’s struggling market on Sunday, saying it would halve the stamp duty on stock trading in order to boost investor confidence.

The move marks the latest in a string of attempts by China’s top officials to boost stimulus measures as the world’s second-largest economy has struggled to regain momentum after three years of severe pandemic restrictions.

The benchmark CSI 300 index of Shanghai- and Shenzhen-listed stocks climbed as much as 5.5 per cent but closed just 1.2 per cent higher. Hong Kong’s Hang Seng index finished 1 per cent higher.

Elsewhere in the region, Japan’s Topix index rose 1.5 per cent and Australia’s S&P/ASX 200 gained 0.6 per cent.

European luxury goods stocks, which are closely linked to China’s consumer spending expectations, advanced 0.4 per cent, with heavyweights Hermès and LVMH both gaining 0.7 per cent.

In the US, yields on the policy-sensitive two-year Treasuries rose 0.05 percentage points to 5.1 per cent, as investors digested comments on the outlook for global interest rates over the weekend from senior officials at the world’s biggest central banks.

Jay Powell, chair of the US Federal Reserve, told policymakers at the Fed’s economic conference in Jackson Hole, Wyoming, on Friday that US inflation “remains too high” and it necessitates the central bank either holding rates at their current level or raising them to bring inflation down to its 2 per cent target.

The US central bank last raised the benchmark federal funds rate to a 22-year high in July, leaving the door open for additional tightening if economic data continued to signal persistent price pressures.

The dollar, which tends to rise when investors anticipate higher rates, advanced 0.1 per cent against a basket of six peer currencies.