Portugal Colonial - China stocks soar on stimulus, but US and Europe retreat

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China stocks soar on stimulus, but US and Europe retreat

China stocks soar on stimulus, but US and Europe retreat

Chinese stocks surged higher Monday after further economic stimulus measures, while investor caution weighed on US and European stocks after solid gains chalked up last week.

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A profit-warning from auto giant Stellantis and from Britain's Aston Martin sent shivers through the industry, adding to the temptation to lock in gains on the final trading session of the third quarter.

A week of US labour market data, capped by nonfarm payrolls on Friday, will be closely watched for signs of further interest rate cuts for the world's largest economy, as will a speech by Federal Reserve chief Jerome Powell on Monday.

Expectations the Fed has won its war on inflation, giving it room to cut rates even more to boost growth, had sent US indices to record highs last week.

"There are no obvious reasons for investors to turn bearish. But there is some caution creeping in as the major indices trade at or near their all-time highs," said David Morrison, market analyst at Trade Nation.

In Paris, Stellantis -- whose brands include Jeep, Fiat and Peugeot -- saw its shares plummet 14 percent after slashing its operating margin target, citing costs for improving its North America operations and increased Chinese competition.

Britain's Aston Martin also lowered its financial guidance for 2024, sending its shares down 23 percent in afternoon deals.

"Aston Martin is a prime example of how China's economic woes have been making well-off Chinese consumers more cautious," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

"The property crisis has affected perceptions of wealth and put people off buying big-ticket items, like high-end cars," she said.

Shares in other major carmakers also suffered, with Renault losing 4.7 percent and Volkswagen one percent.

In Asia, Shanghai's stock market jumped more than eight percent -- its best day since 2008 -- while Hong Kong briefly leapt around four percent, a day before Chinese markets shut for the Golden Week holiday.

They extended a rally begun last week as Chinese officials announced fiscal measures -- notably interest-rate cuts and eased rules on buying homes -- aimed at igniting growth in the world's second-biggest economy.

Developers were among the best performers in Hong Kong, with Kaisa rocketing more than 80 percent, Sunac jumping over 55 percent and Agile Group up 19 percent.

Tech firms also enjoyed strong gains, with e-commerce giant JD.com advancing more than 11 percent and rival Alibaba up almost eight percent.

"The Chinese stock market rally will take a breather during the October holiday, which will give investors time to take stock and to decide whether the Asian powerhouse's shares have further to run," said Kathleen Brooks, research director at XTB.

But elsewhere in Asia, Tokyo stocks dropped nearly five percent on expectations incoming prime minister Shigeru Ishiba would pursue policies keeping the yen strong -- which would weigh on Japanese exporters.

Oil prices retreated Monday as high supplies offset further Middle East unrest with the killing of Hezbollah chief Hassan Nasrallah in Lebanon by an Israeli airstrike analysts said.

- Key figures around 1400 GMT -

New York - Dow: DOWN 0.5 percent at 42,090.41 points

New York - S&P 500: DOWN 0.2 percent at 5,7229.67

New York - Nasdaq: UP 0.1 percent at 18,136.42

London - FTSE 100: DOWN 0.7 percent at 8,266.43

Paris - CAC 40: DOWN 1.8 percent at 7,653.13

Frankfurt - DAX: DOWN 0.7 percent at 19,334.22

Tokyo - Nikkei 225: DOWN 4.8 percent at 37,919.55 (close)

Hong Kong - Hang Seng Index: UP 2.4 percent at 21,133.68 (close)

Shanghai - Composite: UP 8.1 percent at 3,336.50 (close)

Euro/dollar: UP at $1.1170 from $1.1169 on Friday

Pound/dollar: UP at $1.3386 from $1.3375

Euro/pound: DOWN at 83.45 pence from 83.47 pence

Dollar/yen: UP at 143.11 yen from 142.15 yen

West Texas Intermediate: DOWN 0.3 percent at $67.98 per barrel

Brent North Sea Crude: DOWN 0.3 percent at $71.29 per barrel

X.M.Francisco--PC