European stocks continue rally on China relief
By Neil Dennis
09:43, 22 September 2021
European equity markets were higher on Wednesday as risk sentiment was buoyed by relief from China as Beijing authorities sought to calm nervous investors by injecting extra liquidity into the financial system.
The pan-European Stoxx 50 index was up 0.8% in mid-morning trade in London at 4,129, after gains in China followed a $18.5bn cash injection into money markets through reverse repo agreements.
Meanwhile, there was further relief as Evergrande – the Chinese property company that has been sending chills through markets due to default fears – said it will make Thursday’s repayment on one of its outstanding bonds.
Overnight in New York, the main markets ended flat to lower as the news from China had yet to filter through.
Back in Europe and the CAC 40 in Paris gained 1.2%, led by steel manufacturer ArcelorMittal, which gained 4.8% to €25.83 ($30.30) as the demand outlook for metals was lifted by hopes China won’t stop at liquidity boosts to aid struggling financial markets.
In Frankfurt, the DAX 30 gained 0.6%, led by industrial powerhouses Siemens, Daimler and HeidelbergCement, all up more than 2%.
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FTSE flutter stocks
London’s FTSE 100, meanwhile, climbed 1.1%, led by Entain – owner of gambling brands Ladbrokes and Coral – which received a £28-a-share ($38) offer from US gaming website DraftKings. Shares in Entain rose 7.5% to £24.30 ($33.14).
The US is a massive growth market in the gambling industry, having only in the past couple of years legalised online sports betting in several states – with more to follow. Hoping to capture the many years of expertise held by UK and European online gambling groups, the sector could be ripe for transatlantic mergers.
Shares in rival UK gaming group Flutter Entertainment, owner of Paddy Power and Betfair, gained 6% to £161.85, while 888 Holdings, which has already launched in three US states through its agreement with Caesars Entertainment, rose 6.4% to 477p.
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