European stocks are rising again as the Chinese rate move helps sentiment

LONDON, May 20 (Reuters) – Shares rose again on Friday after China cut a key credit rating to support its economy, despite a global weekly stock market record record loss amid investor concerns over sluggish growth and high inflation.

China lowered its five-year debt prime rate (LPR) – which affects mortgage prices – by 15 basis points on Friday morning, sharper cuts than expected, as officials seek to mitigate the impact of the recession. This was one year LPR unchanged. read more

At 0833 GMT, Pan-European STOXX 600 (.STOXX) Rose 1.2%, setting its first daily gain in the third.

MSCI Global Equity Code (.MIWD00000PUS). Data extended to January 1988.

“Investors obviously want to do a little bargain-hunting because some stocks seem so cheap at the moment,” said Nathan Sweeney, CIO deputy to multiple assets at Marlborough, an investment manager.

He added that China’s LPR reduction “shows that not all central banks are trying to create a market-selling environment.”

Gains came in Europe and Asia after the Dow Jones Industrial Average rallied late Thursday on Wall Street. (.DJI) 0.75% lower, S&P 500 (.SPX) 0.58% reduction and Nasdaq compound (.IXIC) Reduced by 0.26%.

Eurozone securities were higher after two days of sharp fall as risk perception improved following China’s rate cut.

Germany’s 10-year government bond yields rose 3 basis points (bps) 0.969%, down from last week’s eight-year high of 1.189%.

With the July meeting of the European Central Bank, the money markets are now set at 38 basis points. This suggests that the 25 bps hike is fully priced, and that the markets add up to an approximately 52% probability of a 25 bps move.

The U.S. 10-year yield was 2.860% at the half-base point from the end of Thursday, and 2.873% on Friday. The two-year yield was up 2 bps at 2.631%, compared to the US close of 2.611%.

In the currency markets, movements against the dollar were relatively stagnant, but since the beginning of February it has moved towards an even worse week after a 14-week rise of 10%.

The dollar index, which measures the currency against six major rivals, traded flat at 102.91.

As the dollar depreciated, gold prices stabilized and set their first weekly gains since mid-April. Spot gold rose 0.1% to $ 1,844 an ounce, hitting a one-week high of 1.4% on Thursday.

Oil prices fell as investors worried that global economic growth and tight central bank monetary policy could restrict fuel demand recovery. read more

Brent futures for July delivery were down 31 cents, or 0.28%, at $ 111.73 a barrel, while US West Texas Intermediate (WTI) crude for June delivery was down 56 cents, or 0.5%, at $ 111.65.

Bitcoin was $ 30,295. Ether, the smallest competitor, rose 0.6% to $ 2,030.

Report by Samuel Indyck in London and Andrew Calbright in Shanghai; Editing by John Stone Street

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