European stock markets closed marginally higher on Monday after slipping to a six-week low at the end of last week.
The pan-European Stoxx 600 index ended 0.1% higher, with sectors and major bourses pointing in opposite directions. Auto stocks led gains, up 1.1%, as construction and material stocks dipped 0.6%.
China’s central bank cut its one-year loan prime rate by less than expected Monday, and left its five-year rate unchanged. Economists expected a 15 basis point cut to both due to default risks in the embattled property sector, and raised questions over whether China will deliver a stimulus-led economic turnaround.
Zoe Gillespie, chartered wealth manager at RBC Brewin Dolphin, said the moves showed a “lack of ambition,” but that China faced a “tough play.”
“It’s difficult for the Chinese authorities to stimulate with the high levels of debt, but it’s also difficult when you look at the currency risk as well,” she told CNBC’s “Squawk Box Europe.”
“You’ve got the U.S. raising rates, dollar strengthening… There’s a lot for central policymakers to do to their protect the currency and also stimulate the economy.”
The Federal Reserve’s Jackson Hole symposium begins Thursday, and investors will be hunting for clues on the course of interest rates.
Source : CNBC