European stocks rose on Thursday, as France unveiled a €100bn economic stimulus plan and Spanish pledged to support the economy through the country’s ongoing second wave of COVID-19 cases.
French president Emmanuel Macron on Thursday unveiled details of a bumper investment plan aimed at helping the country’s economy bounce back from the impact of COVID-19.
The €100bn stimulus plan, dubbed “France Relaunch,” includes tax cuts, wage subsidies, and funding for environmental projects, according to Bloomberg.
The announcement helped France’s CAC 40 (^FCHI) rise 1.4% by mid-afternoon, outperforming many continental peers.
Span’s IBEX 35 (^IBEX) also rallied strongly, gaining 1.5% after the country’s labour minister said Spain’s government furlough scheme would be extended for “as long as necessary”. Spain’s health minister also ruled out the possibility of a second lockdown, the Guardian reported, despite rising COVID-19 cases there.
The gains came despite weaker than expected eurozone retail sales. Data showed sales fell by 1.3% in July compared to a month earlier. Bert Colijn, a senior eurozone economist at Dutch bank ING, said it was a “small drop... and it's therefore too early to worry about a double dip for retail.”
The FTSE 100 (^FTSE) was trading 0.3% higher by mid-afternoon. Data published Thursday morning showed the UK’s service sector growing at its fastest rate since 2015.
Stocks were mixed in Asia overnight. Japan’s Nikkei (^N225) gained 0.9%, but elsewhere the Shanghai Composite (000001.SS) dropped 0.6%, the Shenzen Component (399001.SZ) fell 0.6%, and the Hong Kong Hang Seng (^HSI) lost 0.8%. Australia’s ASX 200 (^AXJO) gained 0.8%.
The fightback for the dollar continued, with the greenback making gains against both the euro and sterling. It follows an extended slide for the dollar over the last few months.
“The dollar has regained some ground over the past 24 hours,” AIB’s Fahey wrote in a note on Thursday morning. “This was despite a mixed bag of results from yesterday’s data.”