Weekly Market Update 27/09/2024

Chinese shares had their strongest week of trading since 2008 after Beijing announced an unprecedented economic stimulus package. The announcement on Tuesday included a range of measures designed to revive flagging economic growth and help debt-laden property owners, with the People’s Bank of China cutting the reserve ratio requirement for banks, lowering interest rates and providing direct support for the stock market and mortgages. The CSI 300 Index of Shanghai and Shenzhen-listed companies gained by almost 16% over the week.

The news from China helped to lift sentiment in Europe, as the measures are expected to provide a boost to the struggling German economy. According to data from Berlin, goods worth €254.5 billion (exports and imports) were traded between Germany and the People’s Republic of China in 2023, with China being Germany’s main trading partner for the eighth year running. At the time of writing, the FTSE EuroFirst 300 Index has gained by around 2.5% for the week.

In other news, oil prices fell back on Thursday after reports that Saudi Arabia is ready to abandon its unofficial price target of $100 a barrel for crude, with plans to unwind previous production cuts from 1st December this year. Reduced output from the world’s largest oil exporter and the seven other members of the OPEC+ producer group have failed to sustain higher prices in light of increased output from other sources, particularly the US, as well as weak demand from China. Brent crude fell by 3.5% on the day, hitting the share prices of Europe’s big oil producers such as BP, Shell and TotalEnergies.

Steve Willerton
BA (Hons), Chartered Wealth Manager
Director | Investment Manager