Eurozone stocks climb as ECB rate cut looms ~ EconomyLens.com

London (AFP) – Paris and Frankfurt stock markets climbed and the euro traded mixed Thursday before an expected interest-rate cut from the European Central Bank as the eurozone faces weakening economic activity and falling price pressures. Outside the eurozone, London gained in midday deals after Asian stock markets mainly struggled, with Beijing’s latest plan to boost China’s troubled property sector coming up short of expectations.

Investors are expecting the ECB to cut its benchmark rate by 25 basis-points Thursday, after two previous reductions this year. Eurozone inflation for September has been revised down to 1.7 percent from 1.8 percent, official data showed Thursday. The rate is below the ECB’s two-percent target. A weak economy has also added pressure on the ECB to reduce borrowing costs. “A rate cut today might not be an isolated event as it could take a lot more cuts to regain positive momentum in the economy,” noted Russ Mould, investment director at AJ Bell. “Economic data from the region has been weak of late, meaning the central bank needs to lower the cost of borrowing to encourage more businesses and consumers to spend.”

– China’s property sector crisis –

Hong Kong and Shanghai stock markets closed down, with property stocks tumbling after traders were left disappointed by fresh measures from China’s housing minister to ease a real estate crisis. Housing minister Ni Hong said Thursday that officials would almost double the amount of credit available to complete unfinished housing projects to $562 billion and also help renovate a million homes. However, “there was no new initiative to excite markets about a meaningful revival in a sector,” said Patrick Munnelly, market strategist at traders Tickmill Group.

China, the world’s number-two economy, has struggled to recover since lifting strict Covid controls at the end of 2022, battered by a debt crisis in the property sector and torpid consumer demand. Tokyo also closed lower Thursday, while focus around the world was also on the latest earnings season. Taipei and New York-listed TSMC, which controls more than half the world’s output of chips, announced a bigger-than-expected increase in net profit for the third quarter. Analysts hope the announcement will offset fears over the tech sector after Dutch powerhouse ASML this week cut its 2025 guidance and forecast a slump in sales bookings. “Early earnings from semiconductor manufacturing giant TSMC has allayed fears over a potential slowdown in demand for chips signalled by Tuesday’s dour ASML data,” said Joshua Mahoney, chief market analyst at Scope Markets.

Shares in Finnish telecoms equipment maker Nokia dropped more than four percent after it reported an eight-percent drop in sales. Nestle’s stock price rose 2.7 percent after its new CEO, Laurent Freixe, announced an overhaul of the executive team as sales slump at the food giant.