UPDATE 2-China stimulus, trade progress help European shares mark strong start to decade

  • Reuters
  • Stock Market News
UPDATE 2-China stimulus, trade progress help European shares mark strong start to decade
Credit: © Reuters.

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* China cuts banks' reserve ratio for eighth time since 2018

* Trump says Phase 1 trade deal to be signed on Jan. 15

* Airbus jumps on report it became world's top planemaker

* Tullow Oil sinks as reserves at new oil well disappoint

(Updates to close)

By Susan Mathew

Jan 2 (Reuters) - Fresh monetary stimulus in Beijing and growing Sino-U.S. trade optimism helped European shares stay close to record highs on Thursday with banks and technology stocks leading a broad-based rally.

Riding the high tide across global markets, the pan-European stocks index STOXX 600 .STOXX jumped 0.9% after declining for two straight sessions when caution crept in about how long a U.S.-China trade truce would last.

But U.S. President Donald Trump brightened the mood on Tuesday by saying the Phase 1 agreement would be signed on Jan. 15 at the White House. is an ongoing view from the market that 2020 may feel better than 2019 did," said Will James, deputy head of European equities at Aberdeen Standard Investments. "There is more of a value bias to the market (given the) positive noise around trade."

Lenders .SX7P were on a tear, up 1.9% at their highest in nearly eight months, followed by the technology sector .SX8P that was driven by gains in trade-sensitive chip stocks.

China-exposed mining .SXPP and auto shares .SXAP were also among the biggest gainers along with industrials which were lifted by a 2.3% jump in Airbus AIR.PA after it edged out Boeing (NYSE: BA ) BA.N to become the world's biggest planemaker. lifted the wider French index .FCHI 1.1%. Bank-heavy Spanish .IBEX and Italian .FTMIB indices gained the most in the region, up around 1.4% each, while German shares .GDAXI posted their best day in one month, shrugging off figures that showed the manufacturing sector contracted further in December. zone stocks .STOXXE jumped 1.2% on Thursday despite latest data showing factory activity in the bloc contracting for the eleventh straight month. benchmark European STOXX 600 index ended last year with its biggest annual gain since the global financial crisis on easing recession fears and a loose monetary policy by some of the world's biggest central banks.

Signalling that it stood pat to boost a slowing economy, China's central bank on Wednesday lowered the reserve requirement ratio for banks for the eighth time since 2018, with the latest cut freeing up around 800 billion yuan ($115 billion). shares .FTSE climbed 0.8%. The other key date this month for European markets will be Jan. 31 - the deadline for Britain's exit from the European Union. Higher volatility during this period will also stem from companies starting to report fourth-quarter results and expectations for 2020.

Missing out on the broader rally, Tullow Oil Plc TLW.L shares fell 6.8% an on doubts over commercial viability of a reservoir in its newly struck oil well in offshore Guyana.

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