EUROPEAN and US stocks mostly made cautious advances yesterday as investors awaited central bank rate decisions, while stimulus pledges by Chinese leaders dominated Asian trading.

Hong Kong stocks jumped over 4% after China’s Politburo signalled it would step up support for the stuttering economy.

“The enthusiasm hasn’t filtered through to Europe and the US though, perhaps due to the lack of detail currently on the stimulus measures, but also the distraction of the central bank meetings over the next 48 hours,” said market analyst Craig Erlam at trading platform Oanda.

Progress on inflation could mean both the US Federal Reserve and European Central Bank are about to announce their final rate hikes of the tightening cycle.

“The question is will they acknowledge that or maintain a hawkish position over the rest of the summer?” said Erlam.

The Fed is due to announce its decision today and the ECB tomorrow.

Wall Street indices advanced, with the Dow eking out a 0.1% increase for its 12th straight positive session.

Earlier, Europe’s leading markets finished mostly higher after wobbling, with Paris shedding 0.2%.

Frankfurt edged 0.1% higher despite a key survey showing German business sentiment has fallen for the third month in a row, as pessimism about the state of Europe’s largest economy deepened.

The Ifo institute’s closely-watched confidence barometer, based on a survey of 9,000 companies, fell to 87.3 points in July from 88.6 points last month. 

Data released Monday showed eurozone economic activity shrank at its fastest rate for eight months in July, owing to cuts in manufacturing.

Sentiment was supported by the IMF lifting its 2023 global growth forecast by 0.2%age points to 3.0%.

In corporate news, General Motors shares fell 3.5% despite the carmaker lifting its full-year forecasts after posting a huge jump in second quarter profit and sales.

The company must soon renegotiate a labor contract with the United Auto Workers.

Shares in Spotify fell by 14.3% after the music streaming service reported a huge bump in its operating loss despite increasing the number of paid subscribers and raising prices.

In China, with recent data showing growth stuttering and business activity slowing, top leaders signaled a fresh push to get the post-Covid recovery back on track – particularly for the troubled property sector, which accounts for a major part of the economy.

The announcement “keeps a supportive tone,” which can provide some boost for the recovery and may help market sentiment, said Erin Xin at HSBC.

While it was nowhere near past blockbuster spending plans, the news gave Chinese stocks a boost.

Among standout performers were developers Country Garden and Sunac, which piled on at least 17% each. The two firms are among several struggling under the weight of massive debts.

Key figures around 2050 GMT

New York - Dow: UP 0.1% at 35,438.07 (close)

New York - S&P 500: UP 0.3% at 4,567.46 (close)

New York - Nasdaq: UP 0.6% at 14,144.56 (close)

London - FTSE 100: UP 0.2% at 7,691.80 (close)

Frankfurt - DAX: UP 0.1% at 16,211.59 (close)

Paris - CAC 40: DOWN 0.2% at 7,415.45 (close)

EURO STOXX 50: UP 0.2% at 4,391.30 (close)

Tokyo - Nikkei 225: DOWN 0.1% at 32,682.51 (close)

Hong Kong - Hang Seng Index: UP 4.1% at 19,434.40 (close)

Shanghai - Composite: UP 2.1% at 3,231.52 (close)

Euro/dollar: DOWN at US$1.1058 from US$1.1064 on Monday

Pound/dollar: UP at US$1.2902 from US$1.2829 

Euro/pound: DOWN at 85.68 pence from 86.24 pence

Dollar/yen: DOWN at  ¥140.95 from  ¥141.48 

Brent North Sea crude: UP 1.1% at US$83.64 per barrel

West Texas Intermediate: UP 1.1% at US$79.63 per barrel – AFP, July 26, 2023.