European stocks follow Asian markets higher

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European stocks followed Asia higher on Tuesday, as recent efforts by Beijing to prop up markets bolstered China-linked sectors, while investors prepared for US labour market data due later in the day. 

Europe’s region-wide Stoxx Europe 600 index rose 0.6 per cent, following gains in the previous session, while France’s Cac 40 was up 0.2 per cent and Germany’s Dax added 0.3 per cent. London’s FTSE 100 advanced 1.3 per cent as markets reopened after a bank holiday. 

Basic materials stocks led gains, with the Stoxx Europe 600 Basic Resources index up 1.6 per cent, as traders hoped that fresh economic support measures announced in China over the weekend would bolster demand in the world’s second-largest economy. 

Chinese authorities announced on Sunday their decision to cut the levy on share trading for the first since the 2008 financial crisis, in efforts to support the country’s struggling market. 

China’s CSI 300 rose 1 per cent. The index had risen 1.2 per cent on Monday after much larger early gains melted away. Elsewhere in Asia, Japan’s Topix added 0.2 per cent and South Korea’s Kospi advanced 0.3 per cent.

Meanwhile, investors’ attention turned to fresh US labour market data, which later in the day was expected to show that the number of new job openings fell by 117,000 to 9.5mn in July, in a sign that high interest rates were weighing on demand for workers. 

The data comes ahead of the closely watched US non-farm payrolls report on Friday, which has been one of the key metrics feeding into the Federal Reserve’s policy decisions as its historic monetary tightening cycle approaches its end. 

Having taken interest rates to a 22-year high at its last policy meeting in July, the Fed last week signalled that its future decisions would be data-dependent, adding extra weight to the inflation and labour market reports due before the central bank’s next meeting in September.  

The US personal consumption expenditures price index — the Fed’s preferred measure of inflation — is also due later this week. 

Yields on the policy-sensitive two-year US Treasuries slipped 0.02 percentage points to 4.99 per cent, while yields on the benchmark 10-year note fell by the same amount to 4.19 per cent. Bond yields fall as prices rise. 

The dollar, which tends to fall when investors anticipate lower rates, declined 0.1 per cent against a basket of six peer currencies. 

US futures contracts tracking the benchmark S&P 500 rose 0.1 per cent, while those tracking the tech-heavy Nasdaq 100 advanced 0.2 per cent ahead of the New York opening bell.