European Stocks Surge to Record High Amid China's Stimulus Measures

Europe's STOXX 600 closed at a record high, driven by gains in sectors exposed to China after Beijing's announcement of stimulus measures. Luxury firms were among the biggest gainers. The ECB is anticipated to cut borrowing costs next month, while yield on euro zone government bonds fell.

Europe's STOXX 600 share index soared to a record high on Friday, buoyed by companies and sectors with significant exposure to China. This rally follows Beijing's decision to implement a comprehensive set of stimulus measures earlier this week, with luxury firms emerging as the standout gainers.

The pan-European index rose 0.5% to close at 528.08, marking a weekly gain of over 2%. Sectors like automakers and chemicals, which have considerable ties to China, were among the top performers, each climbing more than 2%. This reflects the critical importance of China to multiple European industries.

China's central bank recently reduced interest rates and injected liquidity into the banking system to kickstart economic growth towards its 5% target for the year. Analysts at Danske Bank noted that Beijing's actions indicate a robust and comprehensive approach to turning the economy around. This marks the most significant round of stimulus since the current economic crisis began three years ago, potentially representing China's 'whatever-it-takes' moment.

(With inputs from agencies.)