# European shares rally as China stimulus lifts recovery hopes Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-05-20 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: European shares surge as Chinese central bank stimulus Meta Description: Auto stocks, banks, and technology names lead gains in Europe, while global market sentiment boosted by China's central bank stimulus. URL: https://financedigest.com/european-shares-rally-as-china-stimulus-lifts-recovery-hopeshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-05-20t075504z3lynxnpei4j088rtroptp4europe-stocks-1736815698418-compressed.jpg) (Reuters) -European shares surged on Friday and were set to erase weekly losses as hopes of an economic recovery in major trading partner China were bolstered by more central bank stimulus. China’s central bank cut its five-year loan prime rate by a more-than-expected 15 basis points, boosting global market sentiment even as COVID-19 cases in Shanghai climbed again. Auto stocks, banks and technology names led gains in Europe, rising between 1.5% and 2.6% and lifting the pan-European STOXX 600 index 1.2%. It is not surprising perhaps that we have a little bit of a bounce today given the good news from [China overnight and as we have had some very negative days this week,”](https://www.financedigest.com/china-arrivals-in-uk-next-week-will-not-face-compulsory-covid-tests-independent.html "China arrivals in UK next week will not face compulsory COVID tests -Independent") said Jonathan Bell, chief investment officer at Stanhope Capital. Global stock markets saw another volatile week as recession fears gripped investors after weak China [retail sales](https://www.financedigest.com/uk-retailers-turn-positive-on-sales-hopes-after-bleak-winter.html "UK retailers turn positive on sales hopes after bleak winter") data and dismal results from big U.S. retailers highlighted the impact from [surging inflation](https://www.financedigest.com/boes-bailey-speaks-about-surging-inflation-and-rate-hikes.html "BoE’s Bailey speaks about surging inflation and rate hikes"). Over the week, [European retail and food](https://www.financedigest.com/european-food-delivery-shapes-up-with-getirs-gorillas-buy.html "European food delivery shapes up with Getir’s Gorillas buy") and beverage stocks lost 0.8% and 4.7%, respectively, while miners outperformed, rising 5.4%. Data on Friday showed British retail [sales jumped](https://www.financedigest.com/indias-tata-motors-jumps-to-a-7-month-high-on-strong-q4-jlr-sales.html "India’s Tata Motors jumps to a 7-month high on strong Q4 JLR sales") unexpectedly in April, but the outlook for consumer spending remained resolutely downbeat. Separate data showed a record rise in [German producer prices last month](https://www.financedigest.com/inflation-in-key-german-states-eases-for-second-month.html "Inflation in key German states eases for second month"), thanks to the Ukraine war pushing up energy costs. One of the things that the market seems to be getting closer to is the [risk of recession](https://www.financedigest.com/high-inflation-recession-risk-widen-ecb-dilemma.html "High inflation, recession risk widen ECB dilemma") and acceptance that the war in Ukraine may not finish quickly,” Bell said. Luxury stocks took a hit as Richemont slumped 9.3%, after the company struck a cautious note over [growth in China after its full-year profit](https://www.financedigest.com/ab-inbev-aims-for-core-profit-growth-of-4-to-8-over-medium-term.html "AB InBev aims for core profit growth of 4% to 8% over medium term") disappointed. The [company also failed](https://www.financedigest.com/uk-to-fine-tech-companies-that-fail-to-remove-self-harm-material.html "UK to fine tech companies that fail to remove self-harm material") to report any meaningful progress in long-running talks about it “Luxury New Retail” partnership. Other [luxury brands](https://www.financedigest.com/loreal-buys-luxury-brand-aesop-with-eye-on-china.html "L’Oreal buys luxury brand Aesop with eye on China") such as Louis Vuitton owner LVMH, Christian Dior and Hugo Boss lost between 0.5% and 1%. (Reporting by Susan Mathew in Bengaluru; Editing by Rashmi Aich and Arun Koyyur) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---