European markets rallied on Thursday, following positive momentum from Asia, driven by China's announcement of aggressive economic stimulus and a drop in oil prices. Europe's Stoxx 600 index jumped 1 percent in early trading, approaching record highs set in August. In Asia, Chinese blue-chip stocks and Hong Kong’s Hang Seng Index surged more than 4 percent, with Chinese property stocks seeing a remarkable 15 percent rise.
The optimism was fueled by an official statement from China’s politburo, which pledged to deploy "necessary fiscal spending" to achieve the country’s economic growth target of around 5 percent. The politburo acknowledged new economic challenges, heightening market expectations for additional stimulus measures beyond those already announced earlier this week.
Bruce Pang, Chief Economist for Greater China at Jones Lang LaSalle, described the stimulus as a "strategic shift" in China’s macroeconomic approach, indicating that coordinated policies were being put in place to address the urgency of the situation.
In addition to China’s stimulus, a report from Bloomberg suggested Beijing is considering injecting up to 1 trillion yuan ($142.39 billion) into its largest state-owned banks to bolster the economy.
Oil prices also took a dip, with Brent and U.S. crude futures falling more than 2%. This decline followed a Financial Times report indicating that Saudi Arabia is preparing to abandon its unofficial 100 dollars-a-barrel price target for crude, signalling a potential increase in oil production. This news added to the positive sentiment in global markets, contributing to the rise in European and Asian shares.
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