The
French CAC 40 index led gains among European shares on Thursday, as France launched
a 100-billion-euro stimulus package to jolt its economy out of recession,
thereby raising hopes that governments will continue to inject money.
The
CAC index climbed 1.72 percent to 5,118.06 points, marking the highest level
since mid-July.
The
Euro STOXX 600 added 1.10 percent to 375.42, hovering near its highest level in
two months recorded at 380.
Germany’s
DAX 30 index soared 1.5 percent to 13,442.06, and U.K. FTSE 100 surged
0.8 percent to 5,987.87.
The
stimulus package encompasses wage subsidies, tax cuts for businesses and
funding for environmental projects, while aims at boosting investment and creating
jobs.
France’s
package improved the sentiment and raised hopes that large economies would continue to stimulate their economies amid the uncertainty surrounding economic outlook as
Covod-19 cases increase across the continent.
Data
released today showed that the French economy really needs stimulus, as the PMI
business activity measure dropped to 51.5 in August from 57.3 in July.
In
the euro area, the Service PMI slipped to 50.5 last month from
54.7 in July.
“Service
sector companies across the eurozone saw growth of business activity grind
almost to a halt in August, fueling worries that the post-lockdown rebound has
started to fade amid ongoing social distancing restrictions linked to COVID-19,”
said Chris Williamson, chief business economist at IHS Markit.
Also,
there is some optimism that a Covid-19 vaccine could be released soon, as U.S. CDC
told health officials that the vaccine could arrive in November.
European
equities got another support from the drop in the euro, which slipped for a
third consecutive session versus the dollar on anticipations that the European
Central Bank could announce new stimulus soon.
The euro meanwhile is
trading slightly lower at 1.1832 after finding some support near the session’s
bottom at 1.1788.