European stock markets experienced a mostly positive day on Monday, following strong gains in Chinese indices. The Hang Seng Index in Hong Kong closed with a 2.2% gain, driven by a nearly 20% surge in the share price of Chinese e-commerce giant Alibaba, which reported strong results, including a significant increase in AI revenue. Chinese equities also received support from official data showing a slight increase in factory output in August, with the Purchasing Managers’ Index rising to 49.4 from 49.3 in July. However, this marked the fifth consecutive month of contraction, as a figure above 50 is required to indicate growth.
In Europe, the London and Frankfurt stock markets saw gains, while Paris remained flat amid ongoing political turmoil in France over contested budget proposals. Wall Street was closed on Monday due to the Labor Day holiday, and the dollar traded mixed against its main rivals. According to Kathleen Brooks, research director at XTB trading group, stocks tend to underperform in September on both sides of the Atlantic. This trend began to emerge at the end of last week, with disappointing results from AI chip giant Nvidia and a sharp selloff in European and US stock markets.
The US inflation reading accelerated on Friday, lowering the odds of sustained interest rate cuts by the Federal Reserve in the coming months. Additionally, a US appeals court ruled that many of President Donald Trump’s tariffs, which have disrupted global trade, were illegal, although they will remain in place for now. The ruling allows President Trump to take the issue to the Supreme Court.
Key figures at around 1045 GMT included the London FTSE 100, which rose 0.1% to 9,198.91 points, while the Paris CAC 40 remained flat at 7,705.31. The Frankfurt DAX gained 0.3% to 23,975.42, and the Tokyo Nikkei 225 fell 1.2% to 42,188.79. The Hong Kong Hang Seng Index closed up 2.2% at 25,671.78, and the Shanghai Composite rose 0.5% to 3,875.53. The euro and pound sterling both strengthened against the dollar, with the euro rising to $1.1722 and the pound increasing to $1.3525. Brent North Sea Crude and West Texas Intermediate both rose, with gains of 0.8% and 0.9%, respectively.
The current market trends and economic data will be closely watched in the coming days, as investors and analysts assess the potential impact on global trade and economic growth. The ongoing trade tensions and political uncertainty in various regions are likely to continue influencing market sentiment, making it essential to monitor developments and adjust strategies accordingly.
