© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, September 1, 2023. REUTERS/Staff/File Photo
By Sruthi Shankar and Shashwat Chauhan
(Reuters) -European shares ended flat on Monday as gains driven by optimism around China’s stimulus measures to revitalise its economy fizzled out, while Danish drugmaker Novo Nordisk (NYSE:)’s shares touched record highs.
The pan-European index held steady at 457.96 points at close after touching near four-week highs earlier in the day.
Europe’s technology sector gained 0.5% as shares of Dutch semiconductor equipment maker ASML rose 0.8%.
Miners finished up 0.6% after rising nearly 2% intraday, as iron ore futures rallied on optimism over top steel producer China’s policy support for its struggling property sector. [IRONORE/]
China stepped up measures to boost the country’s faltering economy, with top banks paving the way for further cuts in lending rates and sources saying Beijing plans further action, including relaxing restrictions on home purchases.
“The slowdown that we’ve seen in China and this redirection away from consumer stimulation and to a more technical and high added value economy is taking a lot more time than people anticipated,” said Michael Browne, chief investment officer at Martin Currie, part of Franklin Templeton.
Separately, according to sources and a document seen by Reuters, embattled Chinese developer Country Garden has won approval from its creditors to extend payments for an onshore private bond, in a major relief for the firm and the crisis-hit property sector.
China-exposed industrials rose 0.1%, while automakers gained 0.3%.
Luxury heavyweight LVMH slipped 0.4%, paring initial gains and weighing on the STOXX 600.
Novo Nordisk rose 0.7% to hit a record high intraday after the Danish drugmaker launched its weight-loss injection Wegovy in Britain. Novo, with a market capitalisation of $424.7 billion, unseated LVMH as Europe’s most-valuable listed company on Friday.
Rising European bond yields also kept a lid on gains
German inflation and euro zone gross domestic product numbers due later in the week will act as major tests of the European economy’s health ahead of the European Central Bank’s policy meeting on Sept. 14.
European stocks ended the last week of August higher, erasing some losses during the month as recent economic data fuelled expectations that major central banks were nearly done with their interest rate hikes.
Friday’s data showing a jump in U.S. unemployment rate cemented bets that the Federal Reserve will keep interest rates unchanged at its policy meeting later this month.
U.S. markets are closed on Monday for Labor Day.
Telecom Italia (BIT:) (TIM) advanced 3.5% after Barclays upgraded the stock to “equal-weight” from “underweight”.