European stocks dip, oil prices rise / Photo: © GETTY IMAGES NORTH AMERICA/AFP/File
European stocks dip, oil prices rise
European stocks slid Monday as a positive lead from Asia on Chinese stimulus measures petered out, while oil prices continued their march higher.
Equities trading in the United States was closed for a public holiday.
"European markets have struggled for gains today in the absence of the US, as the initial boost of a China stimulus inspired rally from Asia markets has started to fade, even though basic resources have outperformed," said market analyst Michael Hewson at CMC Markets.
Data showing a jump in new home sales in China brightened sentiment in Asian trading as a sign that recent government measures to boost the struggling property sector were helping.
Investors are hoping for still more measures to stimulate the world's second largest economy after a number of announcements last week, including reducing mortgage down payments and tax incentives.
"While these individual easing measures may not appear substantial, their collective implementation clearly signals policymakers' intentions to stabilise the property market, spur economic growth, and boost overall sentiment," said SPI Asset Management's Stephen Innes.
"Further targeted measures are anticipated to be incrementally introduced until policymakers are content with the achieved results."
However, observers say that traders are yearning for the government to unveil a big-bang stimulus similar to the $550 billion seen in 2008 during the global financial crisis.
News that battered developer Country Garden had won approval from creditors to extend a deadline for a key bond repayment, narrowly avoiding a potential default, provided some much-needed relief from worries over China's property sector.
Meanwhile, oil prices pushed to or near to their highest levels this year on the prospect that Saudi Arabia and Russia will extend their production caps.
"The continued risk of a tighter market is helping to drive markets higher, raising the prospect that if Chinese demand does pick up in the second half of the year, prices could jump through $90 a barrel thus posing further upside risk to sticky inflation," said Hewson.
The main international contract, Brent crude, briefly hit $89 per barrel.
"That there is still plenty of momentum so close to $90 a barrel may suggest we could see a strong push to break above which would represent a big shift in the market dynamic in quite a short period of time," said Craig Erlam at OANDA trading platform.
- Key figures around 1530 GMT -
London - FTSE 100: DOWN 0.2 percent at 7,279.51 points (close)
Frankfurt - DAX: DOWN 0.1 percent at 15,284.85 (close)
Paris - CAC 40: DOWN 0.2 percent at 7,279.51 (close)
EURO STOXX 50: DOWN less than 0.1 percent at 4,279.87 (close)
New York - Dow: Closed for a public holiday
Tokyo - Nikkei 225: UP 0.7 percent at 32,939.18 (close)
Hong Kong - Hang Seng Index: UP 2.5 percent at 18,844.16 (close)
Shanghai - Composite: UP 1.4 percent at 3,177.06 (close)
Euro/dollar: UP at $1.0790 from $1.0777 on Friday
Pound/dollar: UP at $1.2621 from $1.2590
Dollar/yen: UP at 146.45 yen from 146.25 yen
Euro/pound: DOWN at 85.50 pence from 85.58 pence
Brent North Sea crude: UP 0.4 percent at $88.89 per barrel
West Texas Intermediate: UP 0.4 percent at $85.90 per barrel
burs-rl/cw
P.Murphy--TNT
Featured