May 20 2025, 14:47
European equity indices edged higher Tuesday, boosted by a Chinese rate cut as well as the possibility of peace talks to end the Ukraine conflict.
At 03:05 ET (07:05 GMT), the DAX index in Germany climbed 0.2%, the CAC 40 in France gained 0.2% and the FTSE 100 in the U.K. rose 0.3%.
European stock indices have received a solid lead in from gains in Asia overnight, boosted by the decision of the People’s Bank of China to cut its benchmark loan prime rate, bringing the rate further into record low territory.
The cut signaled that Beijing was open to doling out more monetary stimulus to support the world’s second-largest economy, and a major export market for a number of Europe’s latest companies.
The Reserve Bank of Australia also cut interest rates earlier Tuesday, flagging increasing risks to the Australian economy from global trade uncertainty.
The European Central Bank next meets in June, and is widely expected to cut interest rates once more, having eased monetary policy seven times in the past year.
Inflation doesn’t look to be an issue stopping the ECB from easing further, if German factory prices are any guide.
The German producer price index fell 0.6% on the month in April, data showed earlier Tuesday, resulting in a drop of 0.9% on an annual basis.
Hopes are growing that a peace deal between Ukraine and Russia can be agreed, ending the over three-year conflict.
President Volodymyr Zelenskiy said on Monday that Kyiv and its partners were considering arranging a high-level meeting between Ukraine, Russia, the United States, European Union countries and Britain as part of a push to end Moscow’s war in Ukraine.
“Negotiations between Russia and Ukraine will begin immediately,” U.S. President Donald Trump said in a Truth Social post following his call with Russian President Vladimir Putin, on Monday.
Delegates from the warring countries met last week in Istanbul for the first time since 2022, though they failed to agree to a truce.
Source: Investing.com
