European stocks and U.S. stock futures rose on Tuesday after a series of stimulus measures from China aimed at supporting economic growth spurred investor appetite for riskier assets.
The pan-European STOXX 600 index rose 0.8%, led by sectors with significant exposure to China, including miners, luxury goods makers and automakers.
Brent crude approached $75 a barrel and iron ore prices rose, boosting shares of Rio Tinto PLC and BHP Group Ltd, according to Bloomberg.
U.S. stock futures pointed to gains at the open on Wall Street, while Treasuries fell.
The SXPP index led gains in European sectors, jumping 4.5%, and was on track for its best day in nearly two years, as copper prices hit a two-month high supported by China's measures and improving demand in the region.
Britain's FTSE rose 0.6%, with mining stocks rising on China's stimulus plans.
Risk sentiment received a boost from China's wide-ranging monetary stimulus package on Tuesday, which included cutting reserve requirements for banks and providing liquidity support of at least 800 billion yuan ($114 billion) for stocks.
After news from Beijing helped offset weak economic data out of Europe on Monday, Goldman Sachs Group Inc. strategists warned that regional stocks could be hurt by a European economic slowdown, even if the European Central Bank continues to cut interest rates.
“The Chinese announcement is changing the sentiment around European equities,” said Michael Snead, head of global FX and multi-asset strategy at BNP Paribas. “But it will take some time for the economic impact of China’s stimulus to trickle down to Europe. The news of China’s stimulus may not be enough to remove those downside risks to the European economy yet.”
Strong monetary policy stimulus from China lifted China's stock index to its best daily performance since July 2020 and helped lift the NASDAQ emerging market index more than 1%.
