Europe stocks steady after strong gains for Chinese indices

Hang Seng Index closed with a gain of 2.2%, fuelled by the share price of Chinese ecommerce giant Alibaba soaring nearly 20%

Europe’s main stock markets held broadly steady on Monday after strong gains for Chinese indices.

Hong Kong’s Hang Seng Index closed with a gain of 2.2%, fuelled by the share price of Chinese ecommerce giant Alibaba soaring nearly 20% on bumper results which included a surge in AI revenue.

Chinese equities won support also from official data showing that China’s factory output rose in August, according to analysts.

The Purchasing Managers’ Index (PMI) – a key measure of industrial output – was 49.4, up marginally from 49.3 in July.

However, it was also a fifth consecutive month of decline, as only a figure above 50 indicates growth.

In Europe, the London stock market edged higher, while Frankfurt stock market gained 0.6%.

Paris flattened amid political turmoil in France over contested budget proposals.

In other news, US stock market was closed Monday for Labor Day, while the dollar traded mixed against main rivals.

Stocks tend to underperform this month on both sides of the Atlantic, according to Kathleen Brooks, research director at XTB trading group.

The tide already began to turn at the end of last week, with an underwhelming set of results for (AI chip giant) Nvidia, along with a sharp selloff in stock markets in Europe and the US, Brooks added.

The country’s stock market retreated from record highs Friday as a key US inflation figure accelerated, lowering the odds of sustained cuts to interest rates by the central bank in the coming months.

However, Trade Nation analyst David Morrison said investors interpreted last week’s dip “as simply some mild profit-taking ahead of the long holiday weekend”.