European shares crept higher on Monday on relief over Italy’s budget, tracking rallies in Asia markets after China promised to provide stimulus to stabilize its economy and offset the impact of U.S. tariffs, Reuters reports.
Promises of tax cuts and coordinated official statements of support for stock markets in the world’s second-largest economy saw Chinese shares stage their biggest one-day surge in three years. Shanghai blue chips jumped around 4.3 percent, adding to Friday’s bounce on Beijing’s pledge of support for the economy and companies.
Japan’s Nikkei rose 0.4 percent. Markets elsewhere in Asia also enjoyed healthy gains..
European stocks climbed 0.2 percent after Moody’s kept Italy’s sovereign rating stable on Friday instead of cutting it to negative. The decision fueled a rally in Italian government bonds and boosted shares in the country’s banks.
The Moody’s report and China’s verbal support for its economy helped markets look beyond worries over the impact on global growth from policy tightening by the Federal reserve and the U.S.-China trade war, market participants said.
“It looks like the Chinese authorities will do what they can to stem the negative effects of those factors,” said Investec economist Victoria Clarke.