European stocks opened higher on Monday, following a record-setting day for U.S. markets, although Asian markets faced a downturn due to disappointing investor reactions to China’s new stimulus package.
In Europe, Germany’s DAX gained 1.2%, rising to 19,440.95 points. The French CAC 40 added 1.1%, reaching 7,418.83, and the UK’s FTSE 100 climbed 0.7%, settling at 8,129.57.
U.S. stock futures also pointed to a positive start, with the S&P 500 futures up 0.3% and Dow Jones Industrial Average futures gaining 0.2%.
In contrast, Asian markets showed mixed results following China’s approval of a 6 trillion yuan ($839 billion) economic stimulus plan, aimed at helping local governments manage mounting debt. The stimulus, unveiled at a national legislature meeting on Friday, was seen as less aggressive than many had hoped. Stephen Innes of SPI Asset Management noted that while the stimulus was substantial, it appeared more focused on stabilizing local government finances rather than driving significant economic growth.
In China, inflation data also raised concerns. The country’s inflation rate in October rose by just 0.3%, a slowdown from September’s 0.4% increase, and the lowest in four months.
Asian markets reacted with caution. Hong Kong’s Hang Seng index dropped 1.5%, closing at 20,426.93, while the Shanghai Composite index rebounded from early losses to finish 0.5% higher at 3,470.07. Japan’s Nikkei 225 closed slightly higher, gaining less than 0.1% to 39,533.32, while Australia’s S&P/ASX 200 slipped 0.4% to 8,266.20. South Korea’s Kospi saw a sharper decline, falling 1.2% to 2,531.66.
The U.S. market had a strong performance on Friday. The S&P 500 rose 0.4%, ending at 5,995.54, its biggest weekly gain since early November 2023. The Dow Jones Industrial Average climbed 0.6% to 43,988.99, and the Nasdaq Composite edged up by 0.1%, closing at 19,286.78.
In the bond market, longer-term U.S. Treasury yields retreated slightly. The 10-year Treasury yield fell to 4.30% from 4.33% on Thursday but remained well above mid-September levels when it was near 3.60%. The yield curve has been influenced by the resilience of the U.S. economy, which has exceeded expectations, prompting speculation that the Federal Reserve may slow interest rate cuts.
The rise in Treasury yields has been partly attributed to economic policies proposed by President-elect Donald Trump, which economists believe could lead to higher inflation and a larger government debt burden.
Crude oil prices were little changed on Monday. U.S. benchmark crude oil dipped by 8 cents, trading at $70.30 per barrel, while Brent crude, the international benchmark, fell 20 cents to $74.07 per barrel.
In currency markets, the U.S. dollar strengthened, rising to 153.79 Japanese yen from 152.62 yen. The euro also weakened, slipping to $1.0684 from $1.0723.
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