Europe open: Stoxx nudges towards record; Moncler surges on LVMH deal

European shares held firm at the open on Friday and nudged within sight of fresh records after strong gains in Asia and the US overnight on the back of Chinese stimulus measure to boost the world’s second-biggest economy.

The pan-regional Stoxx 600 index was up 0.18% in early deals to 526.56, just shy of the 526.66 record high.

China's central bank on Friday lowered interest rates and injected liquidity into the banking system as authorities tried to fire the struggling economy back towards this year 5% growth target.

The move follows the announcement of the biggest stimulus measure since the Covid-19 pandemic. Reports overnight said China plans to issue special sovereign bonds worth about 2 trillion yuan this year as part of fresh fiscal stimulus.

Traders will also have eyes on German unemployment data, eurozone sentiment indicators and inflation figures in Europe and the US, with the key Core Personal Consumption Expenditure readout expected later in the day.

Analysts have pencilled in a rise between 0.1% and 0.2% for August.

“Any significant rise above that range could dampen the prospects of further rate cuts by the Federal Reserve, whose current forecast suggests another half point reduction by the end of 2024,” said Hargreaves Lansdown analyst Derren Nathan.

Brent Crude fell again to $71.45 per barrel as speculation Saudi Arabia had abandoned its $100 price target ahead of planned production increases later in the year continued to hit sentiment.

In equity news, shares in Moncler surged as the luxury goods maker’s chief executive Remo Ruffini struck a deal with LVMH which will see LVMH partner with Ruffini to make an expanded investment in the Italian company and a seat on the board.

LVMH shares also gained on the news, while fellow luxury stock Kering along with high-end fashion brands Hugo Boss and Brunello Cucinelli also rose on the China stimulus measures.

Insurance and investment group Prudential rose as the company expanded further into South East Asia through a strategic partnership with Bank Syariah Indonesia.

Reporting by Frank Prenesti for Sharecast.com